The major overhaul of the EU type approval framework would build on the current rules where national authorities are solely responsible for certifying that a vehicle meets all requirements to be placed on the market and for policing manufacturers' compliance with EU law.

The proposals would make vehicle testing more independent and increase surveillance of cars already in circulation.

Jyrki Katainen, vice-president for jobs, growth, investment and competitiveness, said: “The Volkswagen revelations have highlighted that the system which allows cars to be placed on the market needs further improvement. To regain customers' trust in this important industry, we need to tighten the rules but also ensure they are effectively observed. It is essential to restore a level playing field and fair competition in the market.”

The proposal would cover three areas, including reinforcing the independence and quality of testing that allows a car to be placed on the market. Rather than carmakers paying for the designated technical services for testing and inspection, the new system would look to remove the financial “which could lead to conflicts of interest and compromise the independence of testing”.

The European Commission also said that more stringent performance criteria would be introduced for these technical services, which should be regularly and independently audited to obtain and maintain their designation.

In addition, a new market surveillance system would be introduced to control the conformity of cars already in circulation. This would enable Member States and the Commission to carry out spot-checks on vehicles already on the market. Member States would also be able to take safeguard measures against non-compliant vehicles on their territory without waiting for the authority that issued the type approval to take action.

The proposal also looks to reinforce the type approval system with greater European oversight. This would mean the Commission would have the power to suspend, restrict or withdraw the designation of technical services that are “underperforming and too lax in applying the rules”. In the future the Commission will be able to carry out ex-post verification testing (through its Joint Research Centre) and, if needed, initiate recalls.

In response, sustainable transport group Transport & Environment (T&E) said the proposal is effective in ensuring testing services operate independently (with penalties for misconduct) but added its proposals to ensure National Type Approval Authorities are robust and independent are inadequate.

It added that: “These authorities failed to catch Volkswagen cheating, allowed tests to be systematically manipulated, and issued approvals for cars in breach of the rules. The absence of sanctions on compromised national authorities and the ability of carmakers to continue ‘shopping’ around authorities for the best deal are clear omissions from the proposal.”

Greg Archer, clean vehicles director of T&E, said: “Without the threat of future EU sanctions, it will be mission impossible to break the strong bond between national regulators and their carmakers that has protected the industry but at the cost of higher emissions.”

T&E added that it welcomes steps to strengthen market surveillance by EU countries such as re-tests of cars already on the road and the Commission’s ability to do spot-checks, recall cars and fine carmakers for selling cars that do not meet standards on the road.

It said: “However, we stress the need to set a clear target for the number of cars on the road that have to be checked (for example, one in three new models), thus removing the current reluctance of national authorities to test cars once they leave the showroom. Real-world driving emissions tests, recently introduced, must be used for future checks.”