India’s stricter Corporate Average Fuel Efficiency (CAFE) 2 norms, introduced in April 2022, continue to spark controversy as multiple automakers, including Hyundai, Mahindra, and Kia, failed to meet the standards for the financial year 2022-23.
Hyundai’s Request Denied by Ministries
In January and March 2022, Hyundai reportedly requested the Ministry of Power to delay the implementation of CAFE 2 norms by a year. However, by June 2022, the Ministries of Road Transport and Power rejected the plea, sticking to the original April 2022 timeline, according to records obtained through an RTI application by The Indian Express.
A Hyundai spokesperson denied these claims, stating the company is committed to compliance and transparency.
Emission Norms and Compliance Challenges
CAFE 2 norms require automakers to limit fuel consumption to 4.78 litres per 100 km and CO2 emissions to 113 grams per km for all vehicles sold annually. These norms aim to enhance fuel efficiency and reduce fossil fuel consumption and greenhouse gas emissions.
Despite these efforts, eight automakers, including Hyundai, Kia, Mahindra, and Honda, reportedly exceeded mandated fleet emission levels for 2022-23.
Penalties and Contention
Non-compliance could result in penalties totaling around ₹7,300 crore, with Hyundai facing the highest penalty of ₹2,800 crore, followed by Mahindra (₹1,800 crore) and Kia (₹1,300 crore). However, automakers have contested the penalty calculations:
- Hyundai and Mahindra denied receiving formal notifications regarding penalties.
- The government has delayed releasing the Annual Fuel Consumption Compliance Report for 2022-23 due to disputes over the penalty figures.
Historical Compliance and Future Reporting
In 2021-22, before the stricter CAFE 2 norms, all 19 automakers complied with emissions standards. However, the 2022-23 compliance report remains unpublished, delaying subsequent reports, including the one for 2023-24, which is reportedly ready.
Implications for the Automotive Industry
The controversy highlights the challenges faced by automakers in transitioning to stricter emission norms. While compliance is essential for environmental goals, disputes over penalties underscore the need for greater clarity and collaboration between regulators and the industry.
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