Europe's regulation of passenger car emissions has been proven to have failed when it comes to nitrogen oxide emissions (NOx) by diesel engines. Due to historical decisions favouring diesel technology, Europe has become a diesel island with no equal worldwide. As a result, virtually every European citizen breathes in air which is deemed harmful to human health. Real driving emissions (RDE) testing by means of portable emissions measurement systems (PEMS) can potentially eliminate the discrepancy between lab and road tests, and will complement the dynamometer type-approval procedure from September 2017 onwards. Despite the significant potential of PEMS testing, the emission assessment has been watered down through politics to provide the automotive manufacturers with additional lead-time. In this way, the lab to road gap is not eliminated but only decreased. This means that diesel cars will continue to over-emit NOx until the 2020s at earliest. This has consequences for effectively bringing down local air quality issues, especially in low emission zones (LEZ). This paper presents a review of the European emission regulation history up to date and makes a comparison with the approach in the other important car markets globally. One can conclude that a substantial update of the European regulatory framework concerning automotive emissions is required, while ambitious post-2021 targets should be set if Europe does not want its automotive industry to lose its competitive position in the global market. In addition, an equilibrium should be sought for between sustainable personal transport in the form of zero-emission vehicles (ZEV), and a sustainable economic climate for the automotive industry. The former is needed if LEZs are to effectively bring down pollutant levels in cities.