Although Europe's powerful car-making industry is exerting intense pressure on an EU environment panel to water down plans to force automakers to slash carbon dioxide emissions, it appears to have failed this time.
A majority in the European Parliament's environment commission voted down efforts to weaken European Commission plans to fine car-makers for failing to meet emissions targets, a spokesman said.
The two biggest political groups in the parliament, the conservatives and the Socialists, had supported a watering down, but Liberals, Greens and some dissenting Socialists managed to outnumber them in the vote.
The parliament as a whole and EU governments were to try reach a compromise on the package by the end of the year, a task which will only be complicated by the vote.
The ACEA European carmakers association blasted the committee's vote as "bad news for Europe."
"The European car industry calls on legislators to refrain from threatening the future of car production in Europe," said ACEA secretary general Ivan Hodac.
"The environment committee has given a wrong signal today. This is bad news for Europe, especially with the overall economic circumstances deteriorating already," he added.
But British Liberal lawmaker Chris Davies hailed the vote as a victory over the car-makers' lobby.
"MEPs today stood up for tougher measures to combat global warming and sent a strong message to corporate lobbyists to back off," he said.
The vote was also welcomed by environmentalists, with German Green Rebecca Harms describing it as a "watershed for climate protection in the European Parliament."
"MEPs have voted to introduce meaningful rules for tackling the damaging climate impact of cars by reducing their CO2 emissions," Harms said.
Under European Commission proposals from last December, automakers selling new cars in Europe would have to cut carbon dioxide emissions to an average of 130 grammes per kilometre travelled by 2012, from about 145-150 grammes on average currently.
Those that miss the target would face a fine that would increase from 20 euros (29.4 dollars) per car for each gram per kilometre over the limit in 2012 to 95 euros by 2015.
The EU parliament's environment committee rejected proposals to put off the deadline until 2015 and also refused proposed lower penalties.
The committee even sought tougher demands on carmakers than what the commission proposed, voting in favour of a long term target to reduce average emissions to 95 grammes of CO2 per kilometre by 2020.
It also proposed that the targets should apply to heavier cars as well, going beyond the commission's recommendations.
The package, which is still to be approved by the full parliament and EU member states, is strongly opposed by Germany, which makes the most polluting cars in Europe.
With passenger cars generating about 12 percent of overall CO2 emissions in Europe, the package is part of a broader EU effort to reduce emissions by 20 percent from 1990 levels by 2020.