The mayor of London, Ken Livingstone, has changed the capital’s congestion charge into an emissions-based system of penalties and encouragements.
The changes mean drivers of cars and certain pick-ups that emit more than 225g/km of carbon dioxide (CO2) will be forced to pay £25 to enter central London.
However, cars that produce 120g/km or less of CO2 and also meet the Euro 4 air pollution emission standard will be able to enter the capital for free.
The changes will come into effect on October 27.
"Nobody needs to damage the environment by driving a gas guzzling Chelsea Tractor in central London,” the mayor said.
“The CO2 charge will encourage people to switch to cleaner vehicles or public transport and ensure that those who choose to carry on driving the most polluting vehicles help pay for the environmental damage they cause."
The mayor said that the new scheme is flexible and that both the charges and exemptions may be varied in the future.
However, he emphasised that the main aim of the charge was still to tackle congestion and encourage drivers to shift from private vehicles to public transport, walking and cycling.
This is despite independent research published last year, which found that the changes will increase the number of vehicles coming into the capital and do little to cut CO2 emissions.
The mayor’s office said the majority of cars - around 80% - within the congestion charging zone will not be affected by the charges and will continue to pay the £8 standard charge or be eligible to apply for another discount or exemption.
Those cars that will attract the £25 charge are those first registered on or after 1 March 2001 that produce above 225g/km of CO2; cars first registered before 1 March 2001 with engines greater than 3,000cc; and pickups with two rows of seats with CO2 emissions of greater than 225g/km or with engines greater than 3,000cc in size.
The mayor has also removed the 90% residents' discount for residents who drive cars liable for the new CO2 charge.
Friends of the Earth Director, Tony Juniper, said: "Measures that get people to choose greener cars, as well as to drive less, are urgently needed.
"Charging gas-guzzling vehicles more to drive in central London is extremely welcome and supported by most Londoners.
"We are delighted that Mr Livingstone is taking a lead on this issue.”
However, not everyone has welcomed the mayor’s move.
“The congestion charge was originally developed to reduce congestion.
"Changing this will confuse the public and reduce support and trust for future initiatives,” said Sheila Rainger, acting director for the RAC Foundation.
“Motorists are not able to change their vehicles overnight and people change their cars less often in London than the rest of the UK.
"The discount for smaller vehicles may encourage a few families to purchase them as second cars but a small car isn't a realistic choice for everyone.”
She said the changes will do very little to cut CO2 in London and that the mayor was engaged in ‘political gesturing’ rather than a serious attempt to tackle London's air quality problems.