Spain became the latest European country to set out plans to reduce carbon emissions and oil imports this week, as the government committed to having a million electric or hybrid vehicles on its roads by 2014 and unveiled one of the most ambitious energy efficiency programmes ever pursued by a major economy.

The socialist government announced a swathe of measures as part of a €235m five-year initiative designed to reduce oil imports by 10 per cent a year, saving the economy more than €4bn.

Central to the fuel saving strategy, will be an overhaul of the country's transport regulations that will see the speed limit on motorways cut by 20 per cent to 50mph.

In addition, new rules will require government vehicles to run on at least 20 per cent biofuels, while public transport systems in many cities will be kept open later at weekends to help discourage car use.

A major new investment programme will also aim to have one million electric or hybrid cars on Spanish roads by 2014. Unveiling the ambitious target, industry minister Miguel Sebastian said that electric vehicles represented the future of transport and predicted that they would prove the "driver of the industrial revolution".

In further measures to save energy, street lighting levels are to be cut in half, while new rules governing public buildings will put a limit on the extent to which buildings can be cooled or heated. Furthermore, each household will receive two free energy saving light bulbs as part of an initiative that will see almost 50 million free bulbs distributed.

The government also moved to tackle aviation emissions associated with its huge tourism industry, giving the go ahead for commercial airlines to use military air routes – a move it said would make journeys up to 20 per cent cheaper.

Sebastian said that the strategy was a necessary response to the "third world oil shock", adding that everybody could play a part in saving energy. "Every time we ease off the accelerator, we boost national income and employment," he said.

Spain has been hit particularly hard by rising oil prices. Despite being a leader in solar and wind energy, fossil fuels still account for 84 per cent of the country's energy mix – the highest proportion in Europe – and with minimal natural reserves the country is heavily reliant on imports. The government estimates it has spent €17bn on oil imports in the last year alone.