British based carmakers will have to cut emissions of new vehicles by almost a fifth by 2014, following a new deal agreed in Brussels.
Conservative MEP Martin Callanan, who represents the North East of England, told the BBC: "This deal represents a balance between the needs of the environment and the car industry across Europe, which is suffering massively at the moment.."
Callanan played a leading role in the negotiations and is confident the decision will encourage carmakers to invest in clean technology.
The MEP is happy special clauses have been included in an effort to protect manufacturers such as Jaguar Land Rover.
It is hoped the emissions reductions the company will have to achieve will not cripple them.