Auto cos fume over new emission norms
Indian automakers have strongly opposed a proposal from the country’s energy efficiency and conservation agency to align their fuel efficiency standards with Europe’s new vehicle carbon emission norms.
According to three people aware of the matter, the automakers have told the Bureau of Energy Efficiency (BEE) that the target of close to 70 gm per km of CO2 emissions by 2030 under the proposed corporate average fuel efficiency (CAFE-III) norms is “highly impractical”. They claim that despite significant investments in electrification, internal combustion engine (ICE) vehicles will dominate the market for the next decade.
An expert committee steered by the BEE—and advised by US non-profit International Council on Clean Transportation— has impressed upon the automakers in confidential meetings that it wants to accelerate India’s CO2 reduction efforts, and encourage faster adoption of electric vehicles (EV) by imposing stricter standards on original equipment manufacturers (OEMs), the people said.
This would include penalties for non-compliance with emissions reduction norms.
“(The proposal) will have devastating effects on sales, jobs and the financial health of OEMs if such stringent rules come into effect, given the nascency of the EV technology in India, and its underdeveloped charging infrastructure compared to Europe, against which the BEE is benchmarking India’s carbon emissions,” one of the three persons cited above said on the condition of anonymity. “So, there is certainly a rift between the two currently, and it is reasonable to believe such standards cannot come to pass as it is.”
CAFE norms relate to carbon emissions from the full fleet of a company, including vehicles with conventional and cleanfuel engines. So, a higher number of EVs, hybrids, small ICE vehicles (which emit less carbon), or those with more fuel-efficient fossil engines such as CNG, in a company’s fleet of cars sold would reduce its carbon emissions under CAFE-III.
“The bigger play is to reduce oil imports, but such hastened electrification will come at a cost, which will affect demand negatively,” another person cited above said, declining to be identified as the talks are private. “It’ll be challenging to meet such a target, so I don’t believe the government will go for such strict standards.”
Mint has learnt that some sections of the auto industry have also sought a carbon trading mechanism, which will enable OEMs to buy and sell carbon credits, but the proposal isn’t actively being considered yet. In Europe, OEMs that exceed their CO2 emissions targets for vehicles can purchase carbon credits or allowances from other OEMs to offset their excess emissions.