Bentley, Bugatti and Luxury Cars Hit by EU Carbon Limits

The European Union's carbon emissions tax could hit luxury car markets badly by putting thousands of pounds on the retail price of gas guzzlers.

A report by the European Environment Agency (EEA) warns that Bugatti could face a charge of €40,000 (£25,000) per vehicle under the EU rules while Bentley could be hit by €20,000 in penalties.

According to the European Commission, passenger cars alone are responsible for around 12 percent of total EU emissions of carbon dioxide (CO2), the main greenhouse gas. As part of efforts to tackle climate change, the commission has set emission performance standards for new cars.

That legislation, adopted in 2009, is the cornerstone of the EU's strategy to improve the fuel economy of cars and ensure that average emissions from new passenger cars in the EU do not exceed 120 gCO2/km.

The move was strongly criticized by luxury carmakers like Germany's BMW and France's Peugeot during that time.

Although, currently it is unclear if the penalties will actually be levied, the study by the EEA casts a fresh light on how the motor industry is responding to one of the EU's more contentious environmental policies.

The EEA is regarded as the first official body that has calculated how close carmakers are to meeting their targets.

"Road transport is responsible for 17.5 % of overall greenhouse gas emissions in Europe and its emissions increased by 23 percent between 1990 and 2009. To reduce the CO2 emissions of the road transport sector, European legislation has introduced mandatory CO2 emissions limits for new passenger cars," mentions the EEA.

"The average emission level of a new car registered in the European Union in 2010 was 140.3 gCO2/km. Overall, car manufacturers must achieve a CO2 emission target of 130 g CO2/km by 2015 as an average value for the fleet of new cars registered in the EU. This target will be gradually phased in from 2012," the Agency further states.