BRUSSELS, Jan 22 (Reuters) - The European Commission has delayed proposals on reducing carbon dioxide (CO2) emissions from cars because of disagreement over whether industry targets should be binding, a European Union source said on Monday.

The Commission was due to present its proposals on Wednesday along with a package of measures covering fuel quality standards and competitiveness in the EU auto industry.

Environment Commissioner Stavros Dimas has called for a binding cap on emissions of heat-trapping CO2 by motor vehicles, but that proposal has been resisted by Industry Commissioner Guenter Verheugen and, the source said, European Commission President Jose Manuel Barroso. "The whole package ... will be postponed," an EU source told Reuters. "Dimas does not want legislation which is meaningless."

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