Government of India has notified, a set of new mandatory fuel efficiency norms, named 'Corporate Average Fuel Consumption' (CAFC) for the passenger vehicles in the country. According to the government, this move will help the industry to reduce its carbon footprint. Currently, out of the more than 80 car models running on Indian roads, only around eight comply with these standards.
Under the CAFC norms, the industry will have to ensure that the mileage of cars on Indian roads improves by 10 percent by 2021 and the second phase, for which the government did not specify a time deadline, will begin from 2022 and targets a fuel efficiency improvement by 30 percent. In about eight different categories, fuel consumption will be calculated on the basis of vehicle's weight. These new standards will be executed by the Ministry of Road Transport and Highways of India and will put India in the same category as the United States, Germany, Japan and China where such strict norms of fuel efficiency are already in place.
After the implementation of the new norms, the Carbon dioxide (CO2)emissions by vehicles, are likely to come down from 142 gm/km in 2010-11 to 129.8 gm by 2021-22 and 113gm 2022 onwards. A report by Yale and Columbia universities last month called Delhi the world’s most polluted city and car penetration levels in India are only 1/15th those of the United States.
If the company's are unable to meet up the new norms, penalty will be imposed. Under the Energy Conservation Act, 2001, car makers that fail to meet carbon emission norms will be fined INR 10 lakh initially and asked to pay a penalty of INR 10,000 daily, till their car models meet the norms.