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Mint
10-07-2025
- Automotive
- Mint
Small cars face a stricter fuel efficiency threat even as sales crater. Will there be a rethink?
India's top energy efficiency agency is exploring possible ways to ease proposed emission caps for small cars amid plummeting demand, according to two people aware of the matter, even as electric vehicle makers oppose such a relief. The potential plan may allow small cars a regulatory relaxation in the initial years from the next-generation Corporate Average Fuel Efficiency (CAFE) standards, which are aimed at making vehicles more fuel-efficient, the people said on the condition of anonymity. This will be followed by a gradual tightening in the subsequent years, they said. The Bureau of Energy Efficiency (BEE), which is tasked with finalising CAFE III and IV norms, is studying the viability of easing these emission norms for small cars, the second person quoted above said. 'There should be something done to make small cars affordable for the common man," said a top Indian government functionary. Sales of small cars have tumbled 71% in five years through March 2025, with automakers attributing it to the high cost of entry-level vehicles. Market leader Maruti Suzuki India Ltd has sought relaxation from stricter CAFE norms—to be rolled out next year—for small cars weighing less than 1,000 kg. But this has split the industry with makers of electric vehicles opposing the demand. Small cars are relatively fuel-efficient and widely used and discussions around CAFE norms for this segment are increasingly growing relevant, said Saket Mehra, partner and automotive industry leader, Grant Thornton Bharat. 'Any potential adjustments to the norms must carefully weigh the benefits of affordability and accessibility against the need to maintain momentum in reducing vehicular emissions." Stringent emission caps CAFE norms, applicable for vehicles weighing under 3,500 kg, create a ceiling for the average carbon dioxide emissions in a manufacturer's fleet. Currently, under the second iteration of these standards, each company is allowed up to 113 grams of CO2 emissions per km on average, calculated by measuring the tailpipe emissions of an individual vehicle. According to a publicly available copy of the BEE memorandum inviting comments from stakeholders, CO2 emissions ceiling will be lowered to 91.7 grams per km in CAFE III and to 70 grams per km in CAFE IV norms. The new norms will come into effect from April 2027 for five years. Stringent CAFE norms will force automakers to manufacture cleaner vehicles with hybrid, electric, hydrogen, or flex fuel powertrains. Violations will result in a penalty of at least ₹10 lakh for every vehicle found emitting excessive carbon dioxide, under the Energy Conservation Act. Automakers will have to pay extra penalties for the amount of CO2 emitted beyond the CAFE ceiling, and breaching it by a higher margin will attract heftier penalties. Easier rules will allow companies like Maruti Suzuki to add more small cars to their portfolio since stringent emission caps limit the number of cars the company can manufacture. 'BEE is in the process of conducting an analysis, a study, on the next iteration of CAFE norms. There have been stakeholder consultations between the industry and the government. MHI and MoRTH will send inputs for the study," said the first of the two people mentioned above, requesting anonymity. BEE, which reports to the Union power ministry, will take inputs from the ministries of heavy industries, and road transport and highways (MoRTH). Queries emailed to the spokespersons of BEE, MHI, and MoRTH on 8 July remained unanswered. Small car demand craters "The main goal of these norms is to make cars more fuel-efficient, which means they use less petrol or diesel to travel the same distance," said Mehra of Grant Thornton Bharat. 'This helps reduce the amount of fuel we consume as a country and lowers the cost of running vehicles for consumers." Mehra said CAFE norms encourage automakers to innovate and produce vehicles that consume less fuel and emit fewer pollutants, aligning with the country's climate goals and public health priorities. Queries emailed on Wednesday to the spokespersons of Maruti Suzuki, Tata Motors Ltd,Hyundai Motors India Ltd, Kia India Pvt Ltd, Toyota Kirloskar Motor Ltd, and Mahindra & Mahindra Ltd remained unanswered. CAFE has become another point of contention between Maruti Suzuki, which makes small cars and hybrid cars, and other automakers which have electric cars in their portfolio. Electric vehicles emit no carbon dioxide, while hybrids emit lesser CO2 than petrol or diesel vehicles. Data from industry lobby Society of Indian Automobile Manufacturers (Siam) showed that sales of small cars–under 3.6 metres in length–fell from 460,772 units in FY19 to 152,262 in FY24 and 133,397 in FY25, a 71% drop in six years, Mint reported on 5 June. However, India's EV market has been gaining momentum, with sales rising about 17% in FY25, according to the Vahan portal. Over 1.9 million EVs were sold in India in FY25, compared with about 1.6 million in FY24. In the same period, sales of petrol and diesel vehicles rose 4% to 21.8 million from 20.9 million in the previous fiscal.
Hindustan Times
01-07-2025
- Business
- Hindustan Times
Govt notifies draft carbon rules for industries
The union environment ministry has issued a draft notification on greenhouse gases emission intensity (GEI) targets for industries under India's carbon credit trading scheme. These emission targets are for 2025-26 and 2026-27 for a range of industries under the carbon trading market and suggest that the carbon market will become operational during the period. Employees guide finished corrugated steel roofing onto a pallet in the tube mill at the manufacturing facility of Uttam Galva Steels Ltd., in Khopoli, Maharashtra, India, on Friday, June 13, 2014. (Bloomberg) The Union government notified the Carbon Credit Trading Scheme in 2023 under the Energy Conservation Act, 2001 which defined the Indian carbon market framework, established for trading of the carbon credit certificates to reduce or remove or avoid the greenhouse gases emissions. The targets have been issued for three companies in aluminium; 253 in the iron and steel sector; 21 in petroleum refining; 11 in petrochemicals; 11 naphtha ; and 173 spinning/textile units which have registered under the scheme. The draft notification also states that the obligated entity (company) shall achieve the GEI targets in the respective compliance year as per the schedule provided in the draft notification. They can meet their GEI target for the respective compliance year by purchasing carbon credits certificates from the Indian carbon market, in case they do not achieve the prescribed GEI target. The GEI Targets will be calculated by the Bureau of Energy Efficiency (BEE). The draft notification also provides for penalty provisions . In case an obligated entity fails to comply with GEI target or fails to submit the carbon credit certificates equivalent to the shortfall , the Central Pollution Control Board (CPCB) will impose Environmental Compensation for the shortfall in the respective compliance year which will be equal to twice of the average price at which carbon credit certificates are traded during the trading cycle of that compliance year. The average price shall be determined by BEE. BEE in a 2023 report said that India has been at the forefront of climate action to meet the global climate goals through its ambitious Nationally Determined Contributions (NDC). 'To facilitate the achievement of India's enhanced NDC targets, the government has initiated the development of the unified carbon market mechanism 'Indian Carbon Market' (ICM) which will mobilize new mitigation opportunities through demand for emission reduction credits by private and public entities,' it added. A single market at the national level, as opposed to having multiple sectoral market instruments, would reduce transaction costs, improve liquidity, enhance a common understanding and targeted capacity development, and streamline the accounting and verification procedures, it said. 'With the recent announcement of greenhouse gas intensity reduction targets for entities within four more sectors, India is getting closer to the operationalisation of its carbon market. While there is no doubt that this instrument will be effective in achieving the goal of cost effective industrial decarbonisation, the government should now start assessing the impact of potential inclusion of currently excluded power sector within the carbon market's ambit. If solutions to address the impact on power prices, distribution companies' revenues and coal capacity to ensure power affordability, reliability and security can be found, the next immediate step should be to include the power sector which will make India's carbon market even more successful,' said Vaibhav Chaturvedi, Senior Fellow at Council on Energy, Environment and Water.
The Hindu
06-06-2025
- Business
- The Hindu
Energy Management Centre to establish Carbon Credit Facilitation Centre
The Energy Management Centre - Kerala (EMC) has announced plans to establish a Carbon Credit Facilitation Centre. The establishment of the centre is aimed at assisting public and private institutions in the State to secure carbon credits. The EMC has decided to empanel six consultancy firms specialising in carbon-credit marketing to support the new centre, EMC director R. Harikumar said. The EMC announced its plans for the facilitation centre during a workshop on 'Demystifying Carbon Credit' held as part of the World Environment Day celebrations on June 5. Mr. Harikumar highlighted the centre's role in supporting carbon neutrality projects. 'At present, government institutions seeking to obtain carbon credits have to individually invite tenders and appoint consultancies. The facilitation centre will help them avoid such hassles. Private institutions also can seek help from it for securing the credits,' Mr. Harikumar said. The decision to set up the facility also follows the establishment of the National carbon credit and marketing system, enabled by amendments to the Energy Conservation Act at the national level. In Kerala, the EMC is the nodal agency for energy conservation activities. Electricity Minister K. Krishnankutty inaugurated the workshop. Puneet Kumar, Additional Chief Secretary (Power), emphasised the potential of carbon credit mechanisms in reducing emissions and generating revenue. Kadakampally Surendran, MLA, presided.
Time of India
06-06-2025
- Business
- Time of India
Standalone solar plant subject to 2,735 compliance tasks, 83 clauses carry imprisonment: Report
New Delhi: A standalone solar energy producing plant in Maharashtra, with a corporate office in Haryana, must comply with 799 unique obligations, resulting in 2,735 total annual compliance tasks, according to a report released by TeamLease RegTech. Of the total obligations applicable to the corporate office, 83 carry imprisonment clauses, the report titled Decoding Compliance Management for Renewable Energy Sector stated. The report highlights that these obligations span central, state and municipal levels, and are distributed across seven categories of law and three tiers of legislation. "The corporate office must adhere to 514 compliances, of which 83 carry imprisonment clauses, often for procedural lapses," the report said. The compliance load is broken down into 646 obligations from central legislation, 151 from the state level, and two from municipal regulations. The manufacturing plant component alone requires 51 approvals, permissions and registrations, and must comply with 285 legal mandates. These obligations arise across categories including safety, employee welfare and statutory audits. The regulatory framework involves multiple agencies including the Central Electricity Regulatory Commission (CERC), State Electricity Regulatory Commissions (SERCs), and the Bureau of Energy Efficiency (BEE). Obligations include adherence to Renewable Purchase Obligations (RPOs), Energy Conservation Act, tariff policies, environmental clearances, and grid integration standards in accordance with Central Pollution Control Board (CPCB) norms. Compliance challenges identified in the report include fragmentation across jurisdictions, overlapping mandates from different authorities, inconsistent policy implementation, and delays in land acquisition and environmental clearances. The continued reliance on manual, paper-based compliance systems also increases the risk of non-compliance, it said. The 799 obligations are spread across categories such as labour (244), secretarial (238), industry-specific (106), finance and taxation (84), environment health and safety (EHS) (58), commercial (38), and general (31). In terms of frequency, these include 58 monthly, 94 quarterly, 45 half-yearly and 114 annual compliances. The remaining 88 are event-based or one-time obligations. "The regulatory landscape circumscribes various standards, authorities and compliance requirements," the report noted. It further explained that the complexity is increased by the concurrent jurisdiction of central and state governments in areas like labour and electricity. The report detailed that approvals required to establish and operate the plant cover stages such as setting up (10), pre-commissioning (7), post-commissioning (4), and ongoing operations (30), totalling 51 approvals. These are governed under at least 31 Acts and Rules. Imprisonment clauses linked to compliance requirements are most prevalent under labour laws, accounting for 77.1 per cent, followed by secretarial (12 per cent), finance and taxation (8.4 per cent), and EHS (2.4 per cent). In terms of legislative origin, 66.3 per cent of these clauses stem from central laws, while 33.7 per cent are from state laws. The report further highlighted that the compliance types include returns, registers and records, payments, certificates and licenses, notices and correspondence, inspections, safety and welfare, audit and accounts, and others. The company under consideration has 100 or fewer employees and employs more than 20 contract labourers in the factory. It uses diesel generators, fire extinguishers, and consumes batteries at both manufacturing and corporate locations. It also generates e-waste, battery waste, and solid waste, with operations based on zero liquid discharge. The report recommends that renewable energy companies adopt a centralised and automated compliance strategy to manage obligations more efficiently.
Time of India
04-06-2025
- Business
- Time of India
CERC pushes virtual PPAs to help industries meet renewable targets without transmission hurdles
New Delhi: The Central Electricity Regulatory Commission ( CERC ) has floated draft guidelines for virtual power purchase agreements (VPPAs), proposing a regulatory framework to enable enterprises and Designated Consumers to meet their long-term Renewable Energy Consumption Obligations (RCO) under the Energy Conservation Act, 2001. The draft defines VPPAs as non-transferable specific delivery (NTSD) over-the-counter (OTC) financial contracts between a consumer and a renewable energy (RE) generator. The draft defines VPPAs as non-transferable specific delivery (NTSD) over-the-counter (OTC) financial contracts between a consumer and a renewable energy (RE) generator. Under the structure, consumers pay a fixed pre-agreed VPPA price while the RE generator sells power on the exchange. The difference between the VPPA price and the realised market price is settled bilaterally between the two parties, without physical delivery of electricity. The Ministry of Power, through a communication dated March 3, 2025, directed CERC to develop a regulatory mechanism for such contracts to facilitate RCO compliance. In support, the Securities and Exchange Board of India (SEBI), in a letter dated January 31, 2025, clarified that VPPAs are non-tradable OTC contracts and thus do not fall under the purview of the Securities Contracts Regulation Act, 1956. The guidelines provide that RE generators entering VPPAs must register under the REC Regulations, 2022. Renewable Energy Certificates (RECs) generated through such contracts must be transferred to the consumer and extinguished as per REC Registry procedures. These RECs cannot be traded. "The RE generator shall sell electricity through power exchange or any other mode authorised under the Electricity Act 2003, and the difference between the VPPA price and the market price shall be settled bilaterally between the contracting parties as per mutually agreed terms," the draft states. Consumers may execute VPPAs directly, through registered traders, or via OTC platforms recognised by CERC. Disputes related to these contracts will be resolved in accordance with the agreed terms in the bilateral agreement. The Commission has sought stakeholder feedback on the proposed guidelines before finalising the framework. The move is expected to support India's target of achieving 500 GW of installed capacity from non-fossil sources by 2030.
