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CAFE 3.0 rollout: Penalty recovery remains a gray area for carmakers. india news

CAFE 3.0 rollout: Penalty recovery remains a gray area for carmakers

New Delhi: Clarity has been sought from the power and road transport ministries on recovery of penalty imposed on carmakers for failing to meet Corporate Average Fuel Efficiency (CAFE) norms. CAFE, a mandatory regulatory standard, sets average CO2 emissions or fuel consumption limits for the entire fleet of vehicles sold by a car manufacturer.It is learned that the PMO has asked the stakeholder ministries to address this issue keeping in mind that the next phase of CAFE (CAFE 3.0) will have strict norms for compliance.On March 17, TOI had reported that as per the presentation given by the power ministry to the PMO, only Tata Motors among the top five carmakers (80% market share) will be able to meet the target for all five years – FY28 to FY32. Officials had also said that high fines would be imposed in case of non-compliance with the proposed system.“In such a situation, the responsibility for assessment, approval and recovery of penalty should be properly defined. The PMO’s concern is valid given that there has been no recovery of penalty from companies not meeting CAFE 2.0 requirements,” an official said.A fine of around Rs 8,800 crore has been imposed on 10 major carmakers for failing to meet CAFE 2.0 targets by FY23. Officials said while the Bureau of Energy Efficiency has calculated the penalty for each carmaker, they can be recovered by the adjudicating officer under the State Electricity Regulatory Commission, as per the Energy Conservation Act, 2001.“Ideally, the ministry or department that enacts an Act, formulates criteria for assessment and formulates the penalty formula should enforce the task of collecting the fine,” said a person familiar with the developments.

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