BRUSSELS (Reuters) - Fewer European countries could face fines for breaching air pollution limits after recession slowed industrial activity and limits on sulfur emissions kicked in.

Eight EU states, including France and Germany, are likely to have failed to meet EU emission standards in 2011, down from 12 countries in 2010, according to preliminary figures released on Monday by the European Environment Agency (EEA).

Transport emissions were a major cause for overshooting the agreed limits and debate continues this week in the European Parliament on how to implement tougher targets on vehicle emissions that can help nations adhere to air quality laws.

Member states can be taken to the EU courts for non-compliance.

The European Commission has said its standards are already too lax compared with stricter guidelines that the World Health Organization says are needed to protect against health problems such as cardiovascular and lung disease.

It is working on more rigorous air quality limits, expected to be proposed later this year, as it tries to free the air of toxic chemicals that shorten thousands of lives.

The 2011 figures from the EEA, which gathers data to aid EU policy-making, are the most recent full-year data available.

Although the trend is positive, EEA scientists say air quality, especially in cities where traffic is concentrated, is far from adequate and a recovery from recession could have a further negative impact.

"We don't know to what extent the impact of countries coming out of recession will increase emissions across Europe," said EEA air pollution expert Martin Adams.

In Europe, the most serious air pollutants are microscopic particles referred to as particulate matter, including soot, as well as nitrogen oxides and ozone.

Road transport contributes approximately 40 percent of emissions of nitrogen oxides in the European Union. Industry is also a major source.

Reductions from the transport sector have not been as great as originally expected, the EEA said, partly because of higher than expected transport demand and partly because vehicles in the real world emit much more than laboratory testing suggests.

Research has exposed how carmakers exploit loopholes in the testing system, just as debate continues in the European Parliament to try to agree implementation of new emissions standards for cars and vans.

The eight countries that exceeded EU air quality limits are Austria, Belgium, Finland, France, Germany, Ireland, Luxembourg and Spain, according to the preliminary 2011 data.

Although transport in general is still a big problem, the European Union has made strides in cutting some emissions.

Sulfur dioxide emissions, which cause acid rain, have dropped by more than 60 percent from ships in EU ports since a new policy began on shipping fuel in 2010.

(Reporting by Barbara Lewis; Editing by Tom Pfeiffer)