However, manufacturers have criticised the pilot scheme that would see cars sold at dealers carrying labels containing their green credentials.
The proposed system will be based on the recently introduced four Vehicle Excise Duty bands and will run for a year, from late 2002 to 2003, in selected showrooms. The Government has launched a consultation on the details of the proposed scheme and will take on board other suggestions on the exact format.
However, the SMMT believes a new system just three years after the launch of the existing environmental label which became a statutory requirement last year, will not help consumers.
Christopher Macgowan, SMMT chief executive, said: 'We are looking at the DTLR proposals with interest. However, consumers are only now becoming accustomed to the current label. Yet another new initiative by the Government is likely to confuse rather than clarify.'
Transport minister David Jamieson said: 'Any proposal to make the label mandatory will be subject to further consultation.'