The European Union has sought sweeping powers over national car regulations, aiming to prevent a repeat of Volkswagen's emissions test cheating scandal and sparking a tough debate as governments and industry resist change.
Under the proposed new rules, Brussels would be able to demand spot checks on vehicles, order recalls and impose penalties on carmakers of up to 30,000 euro ($A46,410.89) per vehicle for failure to comply with environmental laws if no fine is being imposed by the member state.
The new plans would also authorise individual EU member states to recall cars in violation of regulations but approved by other members of the bloc, encouraging peer review.
The planned legislation is the strongest EU response yet to German carmaker Volkswagen's admission in September that it used software to cheat US diesel admissions tests - a scandal that has shone a light on the EU's lax vehicle regulations.
"We have to make sure that it never happens again," European Commission Vice-President Jyrki Katainen said.
Under existing rules on vehicle or "type" approval, Germany's KBA authority alone has the power to both approve new Volkswagen cars and to revoke those licences, though the vehicles can be sold across the EU single market.
So far, no EU national authority has imposed a penalty on Volkswagen, even though it has said that about 8.5 million of the 11 million vehicles fitted with banned software are in the region.
Critics view this as a sign of collusion between governments and the auto industry, a major source of jobs and exports in the bloc's biggest economies of Germany and France.
If the new legislation is approved by EU states and the European Parliament, future breaches would result in possible multi-billion-euro costs for manufacturers.
"It will be attacked heavily by the member states because it boils down to giving away sovereignty to Brussels," Green member of parliament Bas Eickhout said.
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