* Fiat says will fight to back Commission plan
* Fiat says must not shift burden to makers of smaller cars
* Commission says aims to be fair, neutral, sustainable
By Barbara Lewis and Jennifer Clark
BRUSSELS/TURIN, Italy, July 2 Proposals to toughen EU standards on car emissions have put the giants of the German auto industry on collision course with makers of lighter vehicles, including Italy's Fiat.
The plan from the European Commission, the EU's executive arm, is to enforce a 2020 goal to lower carbon dioxide emissions to an average of 95 grams per kilometre (g/km).
It was expected to be officially published at the start of July, but EU sources said it was being delayed until later in the month.
Divisions have gaped wide over how the proposed new binding standard, which compares with a 2015 mandatory target of 130 g/km, should be enforced across the European fleet.
Sergio Marchionne, president of the car industry association ACEA and CEO of Fiat, said ACEA had been unable to find a unified position.
As Fiat boss, however, he said he supported the Commission proposal and understood the Germans had a different plan, which he hoped would not succeed.
"We have to not shift the burden to smaller carmakers," he said. "This time we are not moving."
"We can keep on arguing," he told reporters in Italy late on Sunday.
EU and industry sources say German manufacturers BMW , Volkswagen and Daimler have been lobbying for a calculation that would mean they had to make a smaller contribution, while makers of lighter cars, such as Renault, Peugeot and Fiat would have to do more.
Germany's Association of the Automotive Industry VDA was not immediately available for comment.
DISTRIBUTION OF EFFORT
The argument, known as the "slope of the curve" debate, has been contentious in the past.
In 2008, it took EU summit talks between German Chancellor Angela Merkel and then French President Nicolas Sarkozy to forge an earlier deal to limit car emissions.
The Commission's assessment of the proposed legislation, seen by Reuters, said the aim was to be "as neutral as possible from the point of competition, socially equitable and sustainable".
To achieve this, the proposal put forward a 60 percent slope, using 2009 baseline data, to determine how the carbon dioxide reduction is distributed so that the extra retail cost would be spread relatively equally across different manufacturers.
EU sources say the German car industry has been lobbying for a steeper slope, based on adjusted calculations.
A curve of 100 percent would mean BMW, for instance, would face costs of around minus 3 percent compared with the average, while Fiat, for instance would see a more than 3 percent increase, th e impact assessment shows.
The Commission and the German industry have been basing their calculations on the weight of cars, which the impact assessment says has been retained as a parameter for now to provide regulatory consistently.
Many say there are arguments for changing it in the future because using mass gives an advantage to makers of heavier cars. They tend to be driven for longer distances than lighter cars, meaning the mass parameter might not be the most effective way to limit emissions.
The European Aluminium Association, which has an interest in lighter cars made from aluminium said the "light-weighting potential has been untapped" and the Commission should be using a footprint measure, referring to the surface between the four wheels, rather than a car's weight.
"A seven-seat car should be allowed to emit more than a two-seat car," Bernard Gilmont, building and transport director at the European Aluminium Association, said.
"The way that the regulation is going by keeping the mass-utility parameter is not stimulating the most straightforward way to achieve the target, which is reducing vehicle emissions." (Editing by Mark Potter)