Skoda Fabia diesel smoking and warning light issue

Sounds like you might have a faulty exhaust sensor. I had a similar issue with my old Renault Megane, though it was the lambda sensor back then. The symptoms were almost identical. The car went into limp mode, and the engine light was constantly on. Have you checked the sensor connections for corrosion or damage? Sometimes it's just a loose wire.

Sensor connections? Where exactly is this exhaust sensor located? And how would I check for corrosion? I'm not really a car expert, more like a 'YouTube mechanic' at best!

Okay, so the exhaust pressure sensor is usually located near the DPF or catalytic converter in the exhaust system. Think of it like a tiny weather station for your exhaust. Corrosion can look like green or white powdery stuff on the connectors. But honestly, if you're not comfortable poking around, it's best to take it to a workshop. A faulty exhaust sensor can cause all sorts of problems, including preventing DPF regeneration, which can lead to more expensive repairs down the line.

Just got the Fabia back from the shop. It was indeed the exhaust sensor. Cost me 245€, but at least the smoke is gone and the warning light is off. Thanks for the help!