Differences in opinion among major Indian automobile manufacturers have stalled progress in reaching a consensus on calculating carbon credits.
Tata Motors, Mahindra & Mahindra (M&M), and Korean companies, including Hyundai Motor India (HMIL) and Kia India are on one side of the divide, while Maruti Suzuki India (MSIL) and Toyota Kirloskar Motor (TKM) stand in opposition.
The disagreement, which surfaced during a recent meeting between original equipment manufacturers (OEMs) and the Bureau of Energy Efficiency (BEE), revolves around the calculation of carbon credits mandated by the Corporate Average Fuel Efficiency (CAFE) regulations.
These regulations aim to reduce overall carbon dioxide emissions from vehicles’ exhausts and increase fuel efficiency by 35% by 2030.
Under the CAFE norms, the highest allowable carbon footprint was set at 130g per km until 2022, with a further reduction to 113g per km thereafter. However, conflicting opinions arise regarding the compensation of previous years’ credits in the current year, with some OEMs advocating for this practice while others oppose it.
Additionally, there is ambiguity surrounding the imposition of CAFE penalties, whether by the central government or state regulators and the mechanism for carrying forward CAFE points into subsequent fiscal years.
While discussions at the recent meeting aimed to resolve these issues and provide clarity, no consensus was reached. The next meeting is scheduled for mid-April to continue discussions and strive for stakeholder agreement.
The disagreement underscores the importance of addressing carbon emissions in the automotive sector, particularly as nations, economies, and companies prioritize sustainability goals.
India, ranking fourth globally in carbon dioxide emissions, has set ambitious targets for achieving net-zero emissions by 2070 and sourcing half of its energy needs from renewable sources by 2030.