CAFE 3.0 launched: Fine recovery for carmakers remains in gray area

NEW DELHI: The Ministry of Power and Road Transport has been asked to clarify the status of recovery of penalties imposed on automakers for failing to meet Corporate Average Fuel Efficiency (CAFE) norms. CAFE is a mandatory regulatory standard that sets limits on the average CO2 emissions or fuel consumption of the entire fleet sold by an automaker.It is reported that considering that the next phase of CAFE (CAFE 3.0) will have stricter compliance regulations, the project office has asked all stakeholder ministries and commissions to resolve this issue.On March 17, The Times of India reported that according to a presentation by the Ministry of Power to the Project Office, among the top five automakers (80% market share), only Tata Motors can achieve its targets for all five years from FY28 to FY32. Officials also said the proposed system would ultimately impose hefty fines if regulations are not followed.“In this case, the responsibilities for assessment, approval and recovery of fines must be correctly defined. Considering that no company that does not meet the requirements of CAFE 2.0 has yet recovered fines, the project office’s concerns are justified,” an official said.Ten major automakers have been fined around Rs 8,800 crore for failing to achieve the CAFE 2.0 target in FY2023. Officials said that although the Bureau of Energy Efficiency has calculated penalties against various car manufacturers, they can be recovered by adjudicating officials under the State Electricity Regulatory Commission under the Energy Conservation Act of 2001.“Ideally, the task of recovering penalties would be carried out by the department or department that enforces the law, sets the assessment norms and sets the penalty formulas,” said one person familiar with the matter.