Why automakers are opposing strict emission regulations in India
What's the story
India's ambitious plan to cut car emissions by a third by 2027 has come under fire from automakers. The proposed move, which is more than double the pace of earlier targets, is seen as a threat to the industry's sustainability. A note from the Society of Indian Automobile Manufacturers (SIAM) highlighted concerns over potential penalties and future investments in this key manufacturing sector.
Industry impact
Proposed cuts could result in hefty penalties
The note from SIAM, which was seen by Bloomberg News, warned that the proposed steep cut could result in billions in penalties. It also said that these measures might jeopardize future investments in one of India's most important manufacturing sectors. A meeting with the Indian government is scheduled for tomorrow in New Delhi, where automakers shall present their case directly to Transport Minister Nitin Gadkari.
Regulatory debate
Different standards for small and light cars
The Centre is also looking at differentiated standards for small and light cars as opposed to heavier ones. This move, which could benefit firms like Maruti Suzuki, has been met with resistance from other carmakers. They argue that splitting standards by size would undermine policy cohesion and might favor a few players in the market.
Incentives
Proposal to stop sale of petrol, diesel vehicles
A lobby led by Maruti Suzuki and Toyota Kirloskar Motor is pushing for hybrids, ethanol-blend cars, and petrol-powered models to get emission credit incentives similar to those given to electric vehicles. Meanwhile, the Centre is considering a proposal to stop the sale of petrol and diesel vehicles by 2040. This idea has been met with consistent resistance from SIAM which warns that such "drastic steps" could undermine ongoing and future investments in the sector.
Recommendations
What does SIAM want?
SIAM has suggested a more gradual 15% reduction target for emissions, instead of the proposed 33% cut. It also recommended a 14.3% cut in how emissions are calculated for cars running on E20, a fuel blend that includes 20% ethanol, and similar cuts for biogas-fueled cars. The industry body has proposed creation of a carbon trading system allowing firms exceeding their targets to sell surplus emissions credits to those falling short.