PARIS-Europe’s biggest annual car show kicks off in Geneva on Tuesday with luxury and crossover vehicles in the limelight, but with the emissions scandal still hanging over the industry.

Automakers are celebrating the end of the sector’s crisis as European sales have returned to levels last seen in 2008 before a global financial meltdown inflicted deep dents on their business. It is a far cry from last year’s show where the industry was under a cloud after Volkswagen admitted in 2015 to having installed software in 11 million diesel engines worldwide to circumvent emissions tests, a scandal that will cost it billions in fines and compensation to car owners.

While Volkswagen has survived the crisis, the scandal has focused attention on emissions and the challenges automakers will have in building cars that can meet ever tougher pollution rules. Carmakers are now having to steer toward engines that emit no more than 95 grams of CO2 per kilometre by 2021 to meet European requirements, compared to 130 grams in 2015. But as diesel cars have been getting a bad rap because of emissions scandals, that target looks harder to meet.

“Diesel cars emit 15 percent less CO2 per kilometre” than gasoline-fuelled models, said Christophe Aufrere, a technology strategist at car parts maker Faurecia.

With electric vehicles still only accounting for a sliver of European car sales, that means gasoline-powered cars have to take up the slack, requiring the industry to squeeze more efficiency out of engines and to reduce vehicles’ weight. Research and development costs “have practically doubled in the past decade” said Remi Cornubert at AT Kearney, a consulting firm, and if carmakers fail to succeed, the bill will be high. Automakers failing to meet the CO2 targets - capping petrol consumption to 4.1 litres per 100 kilometres and diesel to 3.6 litres - will have to pay 95 euros ($100) for every extra CO2 gram emitted by each car - potentially adding up to tens of millions of euros of fines. Jostling among carmakers for market position is also likely to dominate discussions after French carmaker PSA announced Monday the acquisition of General Motors’ European subsidiary, which includes the Opel and Vauxhall brands, for 1.3 billion euros ($1.38 billion), catapulting it into second place in Europe. And there was more good news for PSA in Geneva on Monday after its Peugeot brand won European car of the year for its 3008 urban 4x4, as the show opened to the press.