CAFE 3.0 rollout: Penalty recovery for carmakers remains a grey area | India News
New Delhi: The power and road transport ministries have been asked for clarity on recovery of fines imposed on car makers for failing to meet corporate average fuel efficiency (CAFE) norms. CAFE, a mandatory regulatory standard, sets average CO2 emissions or fuel consumption limits for the entire fleet of vehicles sold by a car manufacturer.It is learned that the PMO has asked the stakeholder ministries to address the issue that the next phase of CAFE (CAFE 3.0) will have stricter norms for compliance.On March 17, TOI reported that among the top five carmakers (80% market share), only Tata Motors will be able to meet all the five-year targets – FY28 to FY32, according to the power ministry’s presentation to the PMO. Officials also said the proposed regime would impose higher penalties in case of non-compliance.“In such a situation, the responsibility for assessment, approval and recovery of fines must be properly defined. The PMO’s concern is valid considering that no fines have been recovered from companies that have not met CAFE 2.0 requirements,” said an official.A penalty of around Rs 8,800 crore has been levied on 10 major carmakers for failure to meet CAFE 2.0 targets by FY23. Officials said that while the Bureau of Energy Efficiency calculates the penalty for each car manufacturer, they can be recovered by the adjudicating officer under the State Electricity Regulatory Commission under the Energy Conservation Act, 2001.“Ideally, the ministry or department that enforces a law, makes rules for assessment and formulates the penalty formula should implement the task of recovering penalties,” said a person familiar with the matter.
