French carmaker Peugeot Citroen has bagged €300 million (£254m) from the EU’s bank to help it develop low carbon technologies.

The cash will be used in a programme to create cars which comply with new European standards for new cars exhaust emissions. The new ‘Euro 6.2’ rules start in 2017.

Peugeot Citroen has begun a programme to reduce carbon dioxide emissions, make vehicles lighter and use more green materials. The company aims to slash fuel use and emissions from petrol, diesel, hybrid and electric vehicles.

Philippe de Fontaine Vive, Vice-President of the European Investment Bank (EIB) said: “This EIB loan perfectly illustrates Europe’s commitment to innovation, sustainable development and its citizens, who will benefit most from this major project. It also gives French industry a competitive edge.”

Road transport contributes around a fifth of the EU’s total carbon dioxide emissions, according to the European Commission.

A German technology firm recently won a loan worth €45 million (£38.7m) from the EIB to improve exhaust technology for cars and commercial vehicles.