Carmakers face heat for violating emission norms, may be fined crores

Many of the leading car manufacturers in the country have been reportedly found guilty of having higher than mandated fleet emission levels, prompting a recommendation to impose heavy penalties - potentially running into several crores of Rupees - on each of these brands.

According to a report in TOI, car manufacturers like Kia, Hyundai, Renault, Skoda, Volkswagen and Nissan have been found violating mandated fleet emission levels by the Bureau of Energy Efficiency (BEE) which has recommended to the central government to impose a heavy penalty. The source-based report further highlights that these car makers will have to immediately move towards vehicles that are either less polluting or run on greener sources of energy.

This could be extremely significant because of the timing. Many northern Indian cities, including the country's capital in Delhi, is grappling under toxic pollution levels. The Air Quality Index or AQI has reached alarming levels in many cities and towns even though it has become a recurring menace at the start of each Winter season. And a large share of the blame each year is pinned on vehicular emissions.

What are mandated fleet emission levels?

The updated Corporate Average Fuel Economy (CAFE) norms came into effect in the country from January this year and is essentially targeted towards bringing down vehicular emission levels. It is imposed on the entire fleet of a brand.

CAFE target for a particular brand is calculated by taking the corporate average kerb weight of the brand by accounting for an individual model's weight and the number of units sold. This is done for all models under a brand and for all units of each of these models sold. The final and mandated fleet - or CO2 - emission levels or CAFE target is calculated based on these numbers. If a particular company's fleet emission levels are above the mandated figures, a penalty can be imposed.

Till December of 2022, a base target of 130 grams of CO2 per kilometre was set against an average industry kerb weight of 1,037 kilos even though targets for each company varied. It became more stringent from January of 2023 onwards with a base target of 113 grams of C02 per kilometre against an average industry kerb weight of 1,145 kilos.

It is also important to note here that carmakers can gain additional credits by bringing in models that run on clean or at least cleaner technologies. For instance, three credits are reserved for a fully-electric model, 2.5 for plug-in hybrid models and two for hybrid electric models. So, every one fully-electric model sold by a company will be counted as three, and so on.

Manufacturers can also bring in specific technologies that are targeted towards saving fuel. Features such as idle start-stop, regenerative braking and even tyre-pressure monitoring system also result in re-calculation of the CO2 of a vehicle.

Car manufacturers at risk of facing penalties?

According to the above-mentioned report which cites calculated made by BEE, Kia stares at the maximum penalty among brands - at ₹373 crore for being around 4.4 units above the CAFE limit. Hyundai too faces a penalty of ₹370 crore for being 7.7 units over the limit set. Honda Cars, Renault, Nissan and Skoda Auto Volkswagen also face penalties.

But the calculations also reportedly reveal that there are manufacturers like Tata Motors, Maruti Suzuki, MG Motor India, Toyota, Mercedes-Benz India, Jaguar Land Rover and Volvo that are in the ‘safe’ zone. Most of these brands offer CNG or hybrid or all-electric models in the market which help in staying below the mandated CO2 emission levels.

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