The EC is seeking industry comment on its draft proposals for Euro V emission level rules which could be introduced by mid-2008.
They are the latest in a series of regulations designed to reduce car emissions that pollute the air and damage health. The previous Euro IV rules came into force in January this year.
Fleets have been warned to expect higher car prices when the tougher emissions levels for petrol and diesels are introduced.
It is not yet known whether company car drivers choosing Euro V vehicles in the future will be exempt from a 3% benefit-in-kind tax penalty, as they currently are for Euro IV until January 2006.
A formal proposal on the scheme will be announced at the end of the year.
Under the draft proposals, diesel cars would be required to reduce emissions of particulates by 80% to five milligrams per kilometre (mg/km) compared to the 25mg/km set under Euro IV rules. Nitrogen oxide (NOX) emissions must be dropped by 20%.
In petrol-powered cars, a reduction of 25% in NOx and hydrocarbon emissions is foreseen, as well as the introduction of a particulate emission limit.
The Society of Motor Manufacturers and Traders (SMMT) said maximum particulate levels under the latest Euro IV standards are already 90% tougher than they were 15 years ago.
It added that the new proposals would mean new diesel cars and vans need particulate traps, which would increase prices, it is claimed.
SMMT chief executive Christopher Macgowan said: ‘The industry is committed to cutting all emissions from new cars and vans and we have come a long way in the last 15 years.
‘However, we need to be clear that the new proposals could mean additional costs to vehicle makers and their customers.
‘Additionally, in focusing on one type of exhaust emission, there is the potential to ignore challenges this may create in other areas.
‘If not handled carefully, Euro V proposals could stall progress in cutting average carbon dioxide from new cars.’