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Emission norms: Top carmakers face strict penalties for violation

The stiff penalties stem from the upgrade in the Corporate Average Fuel Economy (CAFE) standard that went into effect in January of this year


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BS Web Team New Delhi

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The government has found higher-than-mandated fleet emission levels in leading carmakers, including Hyundai, Kia, Honda Cars, Renault, Skoda Auto, Volkswagen India, and Nissan, reported Times of India (ToI). 

The Bureau of Energy Efficiency (BEE) is recommending fines against the companies totalling hundreds of crores of rupees for the violations. As a result, the carmakers will now need to make an immediate shift to producing greener and less polluting vehicles in order to stay within the allowed limits, it added.

The stiff penalties stem from the upgrade in the Corporate Average Fuel Economy (CAFE) standard that went into effect in January of this year. Under the norms, limits are set on the total emission of carbon dioxide. These are computed by taking into account the weight of individual models and the number sold.

Why are the penalties being imposed now?

The move comes at a time when leading metros, such as the Delhi-NCR, Mumbai, and cities in Rajasthan, Punjab, Haryana, and Uttar Pradesh are dealing with hazardous pollution levels and a high degree of particulate matter problem. Even the Supreme Court (SC) has expressed concern over rising pollution levels and urged state and central governments to take immediate action to reduce pollution and fine the violators.

According to the Energy Conservation (Amendment) Bill 2022, which was enacted by the Parliament in December 2022, any corporation with carbon emissions that exceed their mandated fleet norms would face hefty financial penalties.

While the first nine months of fiscal 2022-23 carried mild penalties (Rs 10,000 per day plus an additional Rs 10 lakh), new rules that came into effect in January this year prescribed a heavy fine of Rs 25,000 per unit sold if carbon dioxide emissions for a company’s fleet were 0-4.7 gram/km above prescribed levels.

The penalty for emissions higher than 4.7g is even stiffer at Rs 50,000 per vehicle sold.

Carmakers and their penalties

Korean Kia faces a penalty of Rs 373 crore with the per gram/km of carbon emissions from the company’s fleet standing 4.4 units higher over its mandated corporate average fuel efficiency (CAFE) limit in the January-March 2023 period, BEE findings said.

Kia is closely followed in penalties by Hyundai, which has been fined Rs 370 crore for emitting 7.7 units more carbon per kilometre, it added.

Sources told ToI that even Mahindra & Mahindra faces fines, although the company had indicated to the government that its fleet emissions were under the permissible level in the January-March 2023 period, from when the tougher penalty norms were implemented.

According to initial calculations done by BEE, Honda Cars will be fined Rs 103 crore as its gram/km of carbon emissions is higher by as much as 17 units over the mandated norms. 

For Renault, the penalty would be Rs 75 crore (CO2 emissions higher by 15 units), Nissan Rs 41 crore (higher by 15 units), Skoda Auto Volkswagen Rs 59 crore (higher by 1.1 units) and Force Motors Rs 0.7 crore (higher by 46 units), the BEE calculations showed.

While some of the top companies faced penalties, others were well under the prescribed limit and, in fact, scored far higher than what was mandated for them in terms of carbon dioxide emissions. These included top carmaker Maruti Suzuki, Tata Motors, MG Motor, Toyota Kirloskar, Mercedes-Benz, Jaguar Land Rover, Volvo Auto and FCA India Automotive. 

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First Published: Nov 10 2023 | 2:30 PM IST

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