Draft Rules Proposed To Penalise Carmakers Breaching Fuel Efficiency Norms

(MENAFN- KNN India) New Delhi, Aug 7 (KNN) The Indian government has released draft rules aimed at penalising car manufacturers that fail to meet mandated fuel efficiency and emission targets.

These rules, called the Energy Conservation (Compliance Enforcement) Rules, 2025, would formalise enforcement mechanisms and direct collected penalties into the Central Energy Conservation Fund (CECF).

As per The Economic Times, the Ministry of Power has empowered the Bureau of Energy Efficiency (BEE) to monitor Corporate Average Fuel Efficiency (CAFE) compliance. BEE will assess car models, identify violations, and forward cases to state electricity regulatory commissions (SERCs), which will determine penalties.

This move follows the Energy Conservation (Amendment) Act, 2022, which allowed for such penalties but lacked detailed enforcement rules.

The draft rules aim to bridge this gap, especially after eight automakers reportedly exceeded fuel and emissions limits in 2022–23, facing possible penalties totalling Rs 7,300 crore.

However, automakers argue the enforcement is unfair. They claim the tougher norms only came into effect on January 1, 2023, and should not apply to vehicles sold earlier in the financial year.

Companies like Kia, Renault, and Mahindra & Mahindra are among those flagged for breaching the limit of 4.78 litres per 100 km and 113 grams of CO2 per km.

Meanwhile, a study by the Council on Energy, Environment and Water (CEEW) suggests that cleaner supply chains and greener electricity could cut India's auto emissions by 87 per cent by 2050.

Another report by the Potsdam Institute proposes a joint fossil fuel import tax that could generate $66 billion annually for global climate efforts, potentially expanding to $200 billion with shipping and aviation included.

(KNN Bureau)

MENAFN07082025000155011030ID1109899877