The rules set an average limit of 95 grams of carbon dioxide per kilometer (g/km) for all new cars sold in the EU. The current limit is 130 g/km.
The phase-in would apply to 95 percent of new cars.
Parliament members said the target represents a reduction of 15 million metric tons of CO2 emissions per year, but cautioned the innovation has to be socially acceptable and economically feasible.
The European Union is going to introduce new test cycles which will better reflect real driving conditions.
The new UN-defined World Light Duty Test Procedure (WLTP) which better reflects real-world driving conditions, should come into force at the earliest opportunity, says the text. The European Commission has indicated its support for a 2017 deadline.
The pending update must still be approved by the Council of Ministers to become effective.