The UK government is to oppose a proposal for a tough new EU-wide target on carbon emissions from vehicles, provoking protests from environmental campaigners.

The proposal for a 2025 target, by which emissions per car should not exceed 70g of carbon dioxide per kilometre, was made by Fiona Hall, a Liberal Democrat MEP.

At present, the European commission is working with member states and MEPs to put in place targets on emissions from cars that would apply for the period from now to 2020. The targets would be that emissions from new vehicles sold in 2015 should be no higher than 130g CO2/km, and cars rolling off production lines in 2020 should have emissions not exceeding 95g CO2/km.

Hall, who sits on the industry research and energy committee in the EU parliament, wants a 2025 target to be included as well, in order to give car companies more time to prepare for the changes beyond 2020.

But the Department for Transport (DfT), where Lib Dem Norman Baker is a minister, argues that trying to extend the targets beyond 2020 at this stage will only cause delays to the process of agreeing the 2015 and 2020 targets, which a spokeswoman said needed to be agreed as soon as possible to ensure that car manufacturers can put them in place in time.

After they have been accepted, then work could begin on considering proposals for 2025 and beyond, according to the department.

A DfT spokeswoman said: "It is important to strike the right balance by supporting ambitious targets, while ensuring we do not hinder industry growth or competitiveness and encourage continued investments in low carbon vehicle technologies in the EU. Beyond 2020, it is likely that some form of mandatory targets will continue to be an effective measure for reducing CO2. We would only consider specific targets following a commission review and assessment of the impacts to ensure that target levels were ambitious, but realistic and based on sound evidence."

Hall said: "Norman Baker and I are both committed to further reducing CO2 emissions from cars. But whereas the DfT wants to wait to look at specific targets until after the Commission's review next year, I would like to send a political signal right now that the 2025 target must be ambitious."

But Sara Ayech, campaigner at Greenpeace, said a 2025 proposal could be included without delaying the current considerations, if it were put in place as an indicative target range that could be firmed up in future years after the requisite impact assessments. She said if such a target was not included in this round, it would make it much harder in future to set a 2025 limit in time. Greenpeace said that the proposed 2025 target could save motorists up to £400 a year in fuel costs.

Norman Baker said: "It is quite wrong of Greenpeace to make unfair and inaccurate allegations of this nature. I am not trying to water down this legislation. On the contrary – as always and as I have throughout my political career, I am trying to get the most sensible result for the environment. Greenpeace, in their campaigns, should challenge those who don't care about the environment, rather than those who do."

He said: "The Department for Transport is working hard to drive down emissions from vehicles, both through these complex negotiations in Europe, and elsewhere. We are rightly focused on getting the best outcome from the 2020 targets – which is the main point of current negotiations. We are not in principle against setting a tough 2025 target, but to do so now risks setting industry an overly generous target. Greenpeace should withdraw these allegations."

The government's opposition to setting mandatory car emissions targets beyond 2020 mirrors its position on other environmental goals. The European commission wants to start work on setting targets for emissions cuts beyond 2020, and to put in place targets on renewable energy generation for 2030 that would allow for greater certainty beyond the current 2020 stipulation, of generating 20% of energy from renewable by that date.

But the coalition – despite the unease of many Lib Dems, and many businesses, which would like to see longer term targets on key green goals, as a way of helping companies and governments to prepare for the long term – has strongly opposed setting any new EU mandatory green goals beyond 2020.

It is understood that George Osborne, chancellor of the exchequer, has taken a stance against new mandatory targets.

Details of the transport department's position were contained in a document sent to MEPs, and seen by the Guardian. The document was publicly released by Greenpeace on Monday morning.

Ayech said: "These documents reveal that there is a split at the heart of the Liberal Democrats over policy to reduce carbon emissions and save motorists money. Baker should follow the progressive political lead of Hall and support laws that will help the environment while putting an average of £400 a year back into the pockets of hard-pressed motorists."

Activists from Greenpeace on Monday morning unveiled a large banner in Baker's constituency in Lewes, in east Sussex, calling on him to accept Hall's proposals. A petition with more than 20,000 signatures from the UK, and tens of thousands more from across Europe, will also be presented to the MP.