Parliamentarians in the EU's environment committee have voted to cap CO2 emissions from all new cars from 2012, in a surprise last minute backlash against strong pressure from the German manufacturing industry spearheaded by chancellor Angela Merkel.

The German corporate lobby had sought to phase the cap in over three years from 2012 amidst fears that auto manufacturers would struggle to comply with the new standards and face stiff penalties.

A draft of the agreement leaked to the media earlier this week, suggested that German manufacturers had been successful and that the proposed emission caps would be phased in between 2012 and 2015.

However, in a surprise move the committee rejected the draft agreement and in favour of its original plan to cut average car CO2 emissions by a fifth to 130 grams per kilometre from 2012.

The panel also rejected proposals from the corporate lobby to cut by half penalties of €95 for every gram per kilometre that a car exceeds the cap.

Jos Dings, director of the European Federation for Transport and the Environment, praised the committee for resisting corporate lobbyists.

"They have sent a strong signal that Europeans need fuel efficient cars now, not in five or ten years time. The short-term target is achievable with currently available technology," he said.

However, the package still needs to be rubber stamped by the full European Parliament and Ivan Hodac, secretary general of auto manufacturers group ACEA, told Reuters that it would continue to push for changes to the legislation.

"They clearly do not care about the competitiveness and job creation of the European car industry. But this is just one step in the procedure. It is not the end of the story," he said.

Average car prices may rise by €1,300 because of spending on the new technology to comply with the rules, according to the commission.