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Industry group says Euro 7 emission rules will raise car prices

Second hand cars are pictured at the Auto1.com company grounds in Zoerbig

By Nick Carey

LONDON (Reuters) - The European Union's proposed Euro 7 emission rules for vehicles will complicate life for the auto industry and raise new car prices without bringing their intended environmental benefits, an industry lobby group said on Tuesday.

EU countries and lawmakers are due to negotiate this year the proposed legislation that would tighten limits on car emissions of pollutants, including nitrogen oxides.

The European Automobile Manufacturers' Association's (ACEA) Director General Sigrid de Vries said the draft law was "a prime example" of regulation that would add complexity and uncertainty as the industry struggles with "key decisions and investments".

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At the same time, it would not bring "the environmental benefits it claims to deliver," de Vries added in a statement.

Some carmakers have said Euro 7 would force them to invest in technology for combustion engine models when they have already allocated tens of billions of euros for new zero-emission electric vehicles (EVs).

Europe's leading car-making nation Germany has upset separate negotiations on phasing out fossil fuel vehicles by 2035 with a last-minute objection.

The ACEA said Euro 7 would bring only a marginal improvement over current standards, while raising the average new car price by 2,000 euros ($2,150), forcing many people to keep older polluting models instead of buying new vehicles.

Earlier this week an executive at Volkswagen unit Skoda said the Czech carmaker would have to cut 3,000 jobs if Euro 7 is implemented in its current form.

Ahead of this week's European Council Summit on competitiveness, the ACEA also called for greater support including European subsidies for EVs.

"Today, European vehicle manufacturers are facing a very asymmetrical challenge," ACEA President and Renault CEO Luca de Meo said. "We are no longer leading the technological race."

"At the same time, as purchase incentives for zero-emission vehicles wane in the EU, we note massive support to our competitors in China and the U.S."

($1 = 0.9318 euros)

(Reporting by Nick Carey; editing by Barbara Lewis)