Car makers face stiff penalties for high emissions


The Indian government has identified elevated fleet emission levels in leading car manufacturers, including Hyundai, Kia, Honda Cars, Renault, Skoda Auto, Volkswagen India, and Nissan, exceeding prescribed standards. The Bureau of Energy Efficiency (BEE) is recommending hefty penalties for violations, urging carmakers to shift toward greener and less-polluting vehicles.
Representative image.

At a time when several cities are grappling with pollution, the government has identified elevated fleet emission levels in leading car manufacturers, including Hyundai, Kia, Honda Cars, Renault, Skoda Auto, Volkswagen India, and Nissan, surpassing the prescribed standards, reported TOI.

The Bureau of Energy Efficiency is recommending penalties running into hundreds of crores of rupees against the companies for the violations and the carmakers will now have to do urgent course correction towards greener and less-polluting vehicles to stay within the prescribed limits, sources told TOI.

The significant penalties are a result of the enforcement of upgraded Corporate Average Fuel Economy (CAFE) norms, effective since January of this year. These norms establish limits on the overall carbon dioxide emissions, calculated based on the weight of individual models and their sales numbers.

The decision comes amid the ongoing struggle with severe pollution levels in major metropolitan areas like Delhi-NCR, Mumbai, and cities across Rajasthan, Punjab, Haryana, and Uttar Pradesh. These regions are experiencing hazardous pollution levels and significant particulate matter issues, leading to record-breaking Air Quality Index (AQI) numbers.

The Supreme Court has expressed grave concern over the escalating pollution levels, urging both state and central governments to promptly implement measures to alleviate the situation and impose fines on those violating regulations.

As per the Energy Conservation (Amendment) Bill 2022, which was approved by the Parliament in December 2022, any company with carbon emissions higher than their mandated fleet norms would face heavy financial fines.

While the first nine months of fiscal 2022-23 carried mild penalty levels (Rs 10,000 per day and an additional Rs 10 lakh), the new rules that came into force from January this year prescribed a heavy fine of Rs 25,000 per unit sold in case CO2 emissions for a company’s fleet is 0-4.7 gram/km above prescribed levels. For emissions higher than 4.7g, the penalty is even stiffer at Rs 50,000 per vehicle sold. Based on the findings of the Bureau of Energy Efficiency (BEE), Korean Kia faces the maximum penalty of Rs 373 crore with the per gram/km of carbon emissions from the company’s fleet standing 7.7 units higher over its mandated corporate average fuel efficiency (CAFÉ) limit in the January-March’23 period. Kia is closely followed in penalties by sibling Hyundai which is being fined Rs 370 crore with its gram/km of carbon emissions staying higher by 4.4 units over the mandated norms.

Sources told TOI that even Mahindra & Mahindra runs the risk of fines, although the company has indicated to the government that its fleet emissions are within the prescribed limit in January-March 2023 period, from when the tougher penalty norms got implemented.

Questions sent to most companies, barring Nissan, did not recieve any response. “Nissan Motor India is constrained to comment on this query as we are yet to receive any such notification from the government of India,” said the company.

Based on preliminary calculations conducted by BEE, Honda Cars is expected to face a penalty of Rs 103 crore due to its carbon emissions exceeding the mandated norms by 17 units. Renault is likely to incur a penalty of Rs 75 crore (exceeding CO2 emissions by 15 units), Nissan Rs 41 crore (exceeding by 15 units), Skoda Auto Volkswagen Rs 59 crore (exceeding by 1.1 units), and Force Motors Rs 0.7 crore (exceeding by 46 units). Skoda Auto Volkswagen operates brands such as Skoda, VW, and Audi in India.

While a section of top companies faced penalties, there were others who were well within the prescribed limit, and in fact scored much better than what was mandated for them in terms of CO2 emissions. These included top carmaker Maruti Suzuki, Tata Motors, MG Motor, Toyota Kirloskar, Mercedes-Benz, Jaguar land Rover, Volvo Auto and FCA India Automotive. Many of these companies have got a healthy mix of CNG and hybrid vehicles and even some electrics in their total sales numbers, and thus managed to duck below their mandated CO2 emission numbers.

(With TOI inputs)

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