I really don't believe the CO2 emission goals are achievable or even relevant (emission != budget).
The next Prius has already been announced to have a 1.8 liter engine besides the electric one, and would double the current model's already respectable mpg. It's not inconceivable that this combines with at least a halved CO2 emission, so that would put it at 52. With the current proposed limit being 120, that allows for some pretty decent-powered Hybrid engines for your BMW. And that's presumably not even using diesel fuel, which should allow for even bigger improvements.
The German / American car companies are working on their own Hybrids though as well as fuel cell and so on, diesels can run on ethanol, etc. - it's all coming, but a push in terms of such legislation can make sure it comes sooner rather than later. We've seen this in the past with all manner of other requirements, unleaded fuel, rear safety belts, air bags, etc. etc.