Tata Motors may face penalty for excess emissions from its newly acquired high-end Jaguar and Land Rover (JLR) vehicles with a stringent environment law being enforced in Europe by 2012, reports Economic Times.

The European Commission had adopted a proposal for the legislation in December 2007 in order to reduce CO2 emissions from new passenger cars by 19%. The manufacturers can, however, make cars with emissions above the permitted limits, but have to balance by vehicles which emit less than the set standards.

Thus Jaguar-Land Rover, acquired by Tata Motors (Q,N,C,F)* in March this year, will have to reduce their emissions. The emission standards are crafted in a way such that heavier cars have to improve more than lighter cars.

Premium of 20 Euros per gm per km has been proposed in the first year (2012), rising to 95 Euros by 2015 under this legislation.

Shares of the company declined Rs 10.55, or 2.43%, to settle at Rs 422.8. The total volume of shares traded was 134,343 at the BSE (Wednesday).