Penalties for higher emission levels

Eight automakers fined for higher emissions levels for violating CAFE standards

In an effort to significantly reduce the environmental impact of vehicle emissions, the Indian government tightened Corporate Average Fuel Efficiency (CAFE) norms in January 2023. Under this directive, car manufacturers must ensure that the average fuel consumption of the fleet does not exceed 4.78 marked liters per 100 kilometers. CO2 emissions are also limited to 113g/km.

Under this mandate, eight car manufacturers have been found to have violated these norms. and resulted in hefty penalties for higher emission levels – up to Rs 7,300 crore in fines imposed on eight automakers. Based on the fines levied, Hyundai Motor is expected to face a penalty of Rs 2,837.8 billion. This was followed by Mahindra (Rs 1,788.4 crore), Kia (Rs 1,346.2 crore), Honda (Rs 4.577 billion), Renault (Rs 4.383 billion), Skoda (Rs 2.483 billion), Nissan (Rs. 1.723 billion) and Force Motor (Rs. 1.8 billion). millions).

Penalties for automakers violating CAFE regulations

The center concluded that the fleet emissions levels of these eight carmakers in 2022-23 were above regulatory levels. Automakers argue the penalties are unfair. New, more stringent Corporate Average Fuel Efficiency (CAFE) regulations take effect on January 1, 2023. So, how can penalties be levied on cars sold throughout the financial year?

Corporate Average Fuel Efficiency (CAFE) regulations came into effect in 2017. The goal is to reduce fuel consumption and carbon emissions from passenger cars. The directive applies to all vehicles powered by petrol, diesel, LPG, CNG, hybrid and battery weighing less than 3,500 kg.

During 2017-18, the directive requires vehicles to consume less than 5.5 liters per 100 kilometers and limit average carbon emissions to 130 grams of carbon dioxide per kilometer. All car manufacturers complied with these regulations in 2021-22. These standards will become more stringent in 2023. The European Union’s Ministry of Electricity stipulates that the fuel consumption of all cars must reach no more than 4.78 liters per 100 kilometers, and the carbon emissions must not exceed 113 grams per kilometer.

The new rules encourage automakers to ensure they produce more fuel-efficient cars, thereby reducing pollution. It also includes electric and hybrid vehicles. And require all models sold by car manufacturers within the year to comply with the new CAFE regulations.

Automakers say it’s unfair

They need more clarity from the government as stringent Corporate Average Fuel Efficiency (CAFE) norms will only be introduced from January 1, 2023. Therefore, it would be unfair to calculate these penalties for cars sold throughout the 2023 financial year. This means that penalties are imposed retroactively.

Penalties have been levied per unit sold. These eight carmakers will face a fine of Rs 25,000 per vehicle if the fuel consumption falls below 0.2 liters per 100 kilometers. The penalty for exceeding this limit can be up to Rs 50,000 per vehicle, with a base penalty of Rs 10 lakh.