* German car industry has called for loopholes
* Consumers say price of loopholes will be higher fuel bills
* German politician says big cars lead innovation, need incentives
By Barbara Lewis
BRUSSELS, Jan 18 European Union politicians are sharply divided between those keen for ambitious green car standards they say are needed to keep up with U.S. goals and those trying to limit the impact on makers of big luxury cars, draft reports show.
The European Parliament next week debates Commission plans to enforce lower emissions standards for cars and vans as part of efforts to thrash out new EU law.
Ireland, holder of the six-month rotating EU presidency until the end of June, said it believed the proposal was likely to be watered down, as German politicians, reflecting the views of Germany's car industry, were steering parliamentary debate.
"The Commission proposal is extremely well-balanced," a representative of the Irish presidency said. "There are two German rapporteurs, so it could be diluted through flexibility mechanisms."
Thomas Ulmer, a German Christian Democrat member of the European Parliament, is leading parliamentary discussion on the proposal to enforce a 2020 limit of 95 grams of CO2 per kilometre as an average across the EU car fleet. Another German politician is also leading a separate vans proposal.
Ulmer's report to a parliamentary committee said it was important to meet what he described as "a very ambitious value."
"As, however, it is larger vehicles that generally play a pioneering role in vehicle technology, the rapporteur feels compelled to propose a realistic system of incentives, which will promote the development and use of new, less environmentally-damaging propulsion concepts," said the report, seen by Reuters.
German manufacturers, including Daimler AG, are among those calling for "super-credits" as incentives. Those allow manufacturers to produce more cars that exceed the EU target if they also make very low emission cars, such as electric or hybrid vehicles.
U.S. LOOKS BEYOND 2020
A separate text, also to be debated by politicians, called on the EU to match U.S. regulation that stretches out to 2025, allowing for long business-planning cycles.
"A weakness of the Commission's proposal is the lack of a post-2020 vision," the draft opinion from British Liberal Democrat member of the European Parliament Fiona Hall said.
The United States - famous for gas guzzling - had set a target requiring carmakers to cut fuel consumption in cars sold between 2011 and 2025, she said, urging an EU target of 70 g/km for 2025.
"Because the EU should remain at the forefront of the global race for cleaner vehicles, it should adopt an equally ambitious pace for development," she added.
Hall said while supercredits encouraged ultra-low emission vehicles, they allowed carmakers to make more polluting cars.
Franziska Achterberg, a campaigner at Greenpeace, said Ulmer's proposal on supercredits would "allow manufacturers to exceed their carbon reduction targets massively.
"It is even doubtful that this supposed incentive would lead to more electric cars on the road. What it would certainly do is allow carmakers to continue producing high-emission conventional cars," she said.
Consumer groups say supercredits mean higher fuel costs.
"Meeting the 95 g CO2/km standard in 2020 would give new car buyers in Europe fuel savings of 344 to 465 euros ($460-$620) each year, recouping the potential increase in manufacturing costs in less than three years," Monique Goyens, director-general of the European consumers' organisation BEUC, said.
"BEUC is against weakening the target as supercredits would do, as it would undermine the financial benefits for the average consumer." ($1 = 0.7486 euros) (Editing by James Jukwey)