Emissions from road traffic contribute a substantial part of the total CO2 emissions from the transport sector. The amount of passenger cars is rapidly increasing, which leads to an increase in CO2 emissions, even though the average CO2 emissions from new cars are decreasing. This thesis has evaluated the vehicle technologies available at present and examined the measures currently in use to reduce CO2 emissions from passenger cars, focusing on the European Union and Norway. Suggested measures for reduction in CO2 have been discussed. A harmonisation in fiscal taxation system throughout the European Union should be implemented, where a purely and directly CO2 based taxation system would give the largest CO2 reductions.In Norway a large part of the taxation potential is already utilized through registration tax and fuel tax. The taxes should be altered to be purely CO2 based if the objection of a tax is to prohibit the increase in emissions. By using a taxation system that affects a person’s usage of a car, and not the ownership, could make more people seek other means of transportation.A taxation system should not be implemented without measures to expand and upgrade the public transportation. Vast improvements in the Norwegian public transportation is a must if the reduction of CO2 possible and significant.