The Commission is frustrated with how national authorities have handled the issue, which began last year when Volkswagen admitted to emissions 'discrepancies' in engines fitted in 11 million vehicles.
Volkswagen's admission came after the US Environmental Protection Agency (EPA) accused it of breaching US laws by deploying software in some of its vehicles that allowed it to "cheat" obligations on emissions levels.
The Commission has begun proceedings against the UK, Germany, Greece, the Czech Republic, Lithuania, Luxembourg and Spain for not acting on the evidence uncovered by investigations, or for failure to bring in laws punishing environmental breaches.
European countries must have "effective, proportionate and dissuasive penalties systems in place to deter car manufacturers from breaking the law. Where such a breach of law takes place, for example by using defeat devices to reduce the effectiveness of emission control systems, these penalties must be applied," the Commission said.
The Commission will send letters of formal notice to the Czech Republic, Greece and Lithuania because they have failed to introduce penalties systems into their national law, it said.
It is also opening infringements against the UK, Germany, Luxembourg and Spain for not applying their national provisions on penalties
The Commission believes that Germany and the UK also broke the law by refusing to disclose, when requested by the Commission, "all the technical information gathered in their national investigations regarding potential nitrogen oxide emissions irregularities in cars by Volkswagen Group and other car manufacturers on their territories", it said.
Commissioner Elżbieta Bieńkowska, responsible for internal market, industry, entrepreneurship and SMEs, said: "Abiding by the law is first and foremost the duty of car manufacturers. But national authorities across the EU must ensure that car manufacturers actually comply with the law. For the future, the Commission has tabled proposals to introduce greater European oversight and to make the type approval system more robust. We expect the European Parliament and Council to reach an agreement swiftly."
In June, Germany called on the EU to improve rules on vehicle emission testing to cover the range of adaptations to emissions control systems used by vehicle manufacturers.
While no other manufacturer was using a similar system to Volkswagen's, "it became clear that for many vehicle types, real driving emissions are significantly higher than on the dynamometer", Germany told the European Transport Council.
Manufacturers adapt emissions control systems to driving and environmental conditions in different ways, but primarily based on a temperature window outside of which the emissions reduction is reduced. This is allowed legally if it is done to protect the engine, but there are doubts over whether this is the case for all the vehicles, and legislation is being interpreted in different ways, the note said.
Legislation should therefore state that defeat devices may only be used if they are needed to protect the engine even when using "the best available technology", according to the note.