Under the shadow of COVID-19 and uncertainty over sales, India’s automotive sector has been protesting that scheduled implementation of higher standards of emissions and fuel efficiency next year, and enhanced vehicle safety goals, are deeply affecting the prospects of the industry. Cars and passenger vehicles are becoming unaffordable. This view is opposed equally fiercely by environmental organisations, who point to data showing that automakers are poised to achieve the higher standards, because these are already set low. Fuel efficiency norms have a bearing on carbon dioxide (CO2) emissions, which are now under scrutiny to meet the goals of the Paris Agreement on climate change.
What is the point of contention?
The car industry must comply with the Corporate Average Fuel Efficiency (CAFE) standards, which represents the emissions profile of the models sold by a company, and was first introduced in 2017. These are due to be tightened by April 2022. On August 25, 2021, at a virtual session held as part of the annual convention of the Society of Indian Automobile Manufacturers (SIAM), the Chairman of Maruti Suzuki, R.C. Bhargava, complained that the government failed to match its views on the auto industry’s importance to the economy with measures on the ground to reduce taxes, rigour of safety and emissions norms. This was echoed by TVS Motor Company CMD Venu Srinivasan, who said even entry-level mopeds were being taxes like luxury products.
What are the contentious fuel efficiency-emission standards?
An analysis by the International Council on Clean Transportation (ICCT) found that the average CO2 emissions calculated on the basis of sales in 2017-18 of new Indian passenger cars were 121 gm/km, which was a reduction of 2 gm/km from the fleet average performance in 2015-2016.
According to the ICCT estimates, India’s norms were relatively relaxed. Its report said that the 2017–18 fleet average CO2 emissions were ahead of the targets by 9.0% and 9.5% ahead with flexibility mechanisms – which are used by manufacturers to determine their credits. Without flexibility mechanisms, most corporate groups had already met the 2017–18 standards at least two years early, according to the ICCT. By this calculation the fleet was only 7.3% from fulfilling the fiscal 2022–23 targets, taking flexibility mechanisms into account. Crucially, this meant that it represented a 1.5% annual CO2 emissions reduction, “which is slower than the annual decrease of 2.1% from 2006–2007 to 2017–2018.” Moreover, this was well below the 3.7%–5% annual CO2 emissions reduction requirements for other countries, the analysis concluded.
What are environmental bodies saying?
Enviromental bodies such as the Centre for Science and Environment (CSE) have been arguing that setting the bar low, and extending the deadline would stunt innovation in engine development, as well as block the transition to electric vehicles.
Although the upgraded standards are the second phase of CAFE, which went into effect four years ago, the industry is now citing the effect of the pandemic to support its call for a postponement of implementation.
Mr. Bhargava argued at the SIAM event that he was left wondering whether the belief that cars were a luxury to be owned only by the rich had changed at all in India. Mr. Srinivasan said the basic mode of transport – the moped – had become costlier by up to 50% due to tax, clubbing of three years of insurance and safety norms such as ABS (braking system).
The auto industry, led by SIAM, began lobbying for a postponement of the efficiency standards by two years even in 2020. It argued that heavy investments had been made in the shift from BS IV engines to BS VI, and carmakers needed time to recoup these outlays. In March 2021, in response to a similar argument, Union Transport Minister Nitin Gadkari countered the industry, asking why it was difficult to meet the emissions norms for the domestic market, when the same units were able to produce cars for advanced countries with higher standards.
Environmental organisations also want the government to set a long-term framework with a 2035 horizon, with four-yearly targets to be achieved by the industry on emissions and fuel efficiency.
How does India rate internationally?
The CSE, points out that Europe, “despite having heavier vehicles compared to the low-powered smaller cars of India, has set CO2 standards at 95 CO2 g/km in 2020-21, as opposed to 113 CO2 g/km in India.”
It also says that the standards have been applied only to cars in the country. Moreover, even the calculation of emissions from real world driving are not strict enough, compared to worldwide test standards that measure all stages of operation of a vehicle.
Traffic accidents killed 1,54,732 people in 2019 in India, an increase of 1.3% over the previous year according to the National Crime Records Bureau. COVID-19 reduced mobility and therefore accidents to
