OTTAWA, TORONTO -- Ninety-five per cent of cars on Canadian roads today would flunk the tough fuel economy standards that Ottawa is demanding of auto makers in order to meet Kyoto accord targets.

That statistic, Canada's auto industry says, shows how tall an order the federal government has handed them.

This demand is the focus of an increasingly tense debate between Environment Minister David Anderson and the auto makers, which are a key piston in Canada's economic engine, employing 49,000 people.

Mr. Anderson's demands are Mission: Impossible, auto makers say. His reply? Hogwash.

Ottawa wants auto makers to redesign cars, trucks, minivans and sport utility vehicles so that by 2010, the vehicles in each company's fleet burn 25 per cent less gasoline than they did at the beginning of the decade.

But this order has auto makers reaching for the emergency brake.

"This is a huge, huge challenge," maintains Mark Nantais, president of the Canadian Vehicle Manufacturers Association, a lobby group for DaimlerChrysler Canada Inc., Ford Motor Co. of Canada Ltd. and General Motors of Canada Ltd.

There's no simple explanation for why it can't be done, Mr. Nantais says, rather a combination of factors.

He points to lack of acceptance so far of hybrid vehicles.

Hybrids combine gasoline engines and electric motors. He also cites emission standards; a scarcity of so-called intelligent highway systems that can help direct drivers away from traffic tie-ups; and safety requirements that add weight to vehicles, such as side-impact beams in doors and airbags.

He notes that airbags aren't required in Canada, but the standard for front-end crash protection is so stringent that the only way to meet it is by putting in airbags.

For Mr. Anderson, increases in fuel economy go hand-in-glove with lower emissions and, therefore, lower greenhouse gas production in Canada.

The Kyoto requirements are being phased in starting in 2008, he notes, and auto makers have known since 2002 that they would be included, which gave them plenty of time to hone and improve the technologies that will reduce fuel consumption. If they don't meet the requirements, they will face government regulation, he says, and might end up having to buy and sell credits in a kind of emission-fuel economy marketplace.

"I do not accept the fact that they can't make such technology changes," he says. "If the vehicle, for example, is underpowered, it doesn't seem to take them four years to put in a larger engine or to change the transmission or indeed change other aspects of design."

He compares this debate to the arguments he had with the oil and gas industry about reducing the amount of sulphur in gasoline.

"We heard the same line from the oil and gas industry . . . that it couldn't be done in the time frame. The automotive industry said to me: 'Don't believe them.' They were right. This time, the shoe's on the other foot."

Even as the debate rages, however, auto makers are working flat out to develop technological improvements that will improve fuel economy.

The most obvious is hybrid cars, which are already on the road in the form of the Prius sedan from Toyota Motor Corp. and a hybrid version of the Civic sedan from Honda Motor Co. Ltd.

General Motors Corp. will offer a hybrid pickup truck this year and plans to unveil several hybrids during the next several years. Ford Motor Co. has a hybrid version of its Escape compact sport utility vehicle almost ready for the road.

Toyota's luxury Lexus division plans a hybrid version of its RX330 SUV later this year and Honda will sell a hybrid version of its mid-sized Accord model.

Also on the road are other improvements such as:

So-called cylinder deactivation, a fairly low-cost system that shuts down half an engine's cylinders when full power isn't needed, such as when cruising on a highway.

Continuously variable transmissions that provide better fuel economy than automatic transmissions.

Some auto makers are further ahead than others, such as Honda and Toyota, which have been offering hybrid vehicles for several years.

But a key question that auto makers say Ottawa hasn't answered yet is: From what level do they have to increase fuel economy by 25 per cent?

If the base year is from the early 1980s -- when the fuel economy deal that still guides the industry was reached between Ottawa and the auto makers -- Honda and Toyota and other offshore companies will face huge difficulties in reducing their average passenger car gas consumption to 7.2 litres for every 100 kilometres travelled. The current goal for the industry is that passenger cars use 8.6 litres of gas for every 100 kilometres.

The difficulty arises because in those days, they were selling almost entirely small cars with four-cylinder engines that were already quite fuel efficient. Today, they're selling larger vehicles with six-cylinder and in some cases eight-cylinder engines that gulp more fuel. Because those vehicles are a larger percentage of their fleet today, the auto makers say it would be easier to reduce fuel consumption by 25 per cent if the base year is closer to current times.