Media & Insight
September 22, 2020
CO2 emissions rules are getting tougher. And not only in Europe
7 of the world’s 10 most polluted cities are in India with transportation as a significant and a growing contributor. Road transport is estimated to be responsible for up to 30% of particulate emissions (PM) in Europe and up to 50% of PM emissions in OECD countries (WHO). In Delhi NCR region alone, emissions from transportation sector jumped by 40% from 2010 to 2018 and is set to increase further unless steps are taken.
To that effect, India’s Honourable Supreme Court has come on strong on the transportation sector by skipping the Bharat Stage (BS) 5 norms and directly mandating BS6 from April this year. Also, the Fuel Consumption or CAFÉ norms will become stricter leading up to 2022-23 from the existing norms.
In January 2014, the Government of India notified minimum fuel efficiency norms for passenger vehicles. Two sets of Average Fuel Consumption Standards were announced: first one to be effective from 2017-18 onwards, and a second set of standards to be effective from 2022-23. The standards relate to the Corporate Average Fuel Consumption (in litres/100 km) to the Corporate Average Kerb Weight of all the cars sold by a manufacturer in a fiscal year.
Or, in other words as shown in figure 1, car manufacturers in the first phase from 2017-22, are obliged to meet the new car fleet average target of 130 gm of CO2/km based on an average industry kerb weight of 1037 kg, and in the second phase from 2022-23 onwards, will have to comply to 113 gm of CO2/km based on an average industry kerb weight of 1145 kg, a reduction of about 13% over the period.
This move has significant cost impact on the vehicle manufacturers in India to comply with the regulations along with managing the ongoing slump in the sector.
JATO developed a dashboard for OEM’s to drill through their current position and identify the delta required to bridge the gap to hit the CAFÉ 2 targets which are slated to come into effect from 2022-23. Ministry of Road Transport and Highways (MoRTH) and the Ministry of Power (Bureau of Energy Efficiency) expect the sales-weighted passenger car average kerb weight of vehicles to be 1145kgs by 2022-23 and the relative industry target of 113 gms of CO2/km.
Indian CAFÉ 2 regulations from 2022-23 will require makes and make groups to remain below a set threshold. The performance dashboard shows the current position of the main market participants to the CAFÉ 2 target. Each make group or make has a different CO2 emission target with respect to the weighted kerb weight compared to the total average kerb weight. Dashboard also gives the ability to add your own future vehicles and perform future scenario planning. This dashboard will provide sales-weighted detailed analysis on:
- Make Group, Make, Model, Body Type, Fuel, Transmission level CO2 footprint
- Make Group, Make, Model, Body Type, Fuel, Transmission level current CO2 position
- Make Group, Make, Model, Body Type, Fuel, Transmission level CAFÉ 2 target delta
- Monthly CO2 movement at Make Group, Make, Model, Version level
- Future model scenario planning and LMC forecast
- Super Credits/ CO2 Credit/Debit evaluation
The data is assessed for 25 Makes with 172 models and 1701 versions from the period Apr’19 to Mar’20. Exclusive brands are not considered. Since only select models have CO2 information officially available, ARAI documentation was used to calculate CO2 for those where information was not available. The CO2 emissions also include the super-credits eligibility by the Makes.
Fleet average CO2 emissions – India
In the FY 2019-20, industry stood at sales-weighted 121.1gms of CO2 emissions per km with average sales-weighted kerb weight of 1085 kgs. Maruti Suzuki had the lowest CO2 footprint at 108.6gms/km with the make average weight of 932 kgs, followed by Datsun, Renault, Tata, Honda, Hyundai and Volkswagen which stood at 128.9gms of CO2/km. Makes with the highest CO2 footprint were Mitsubishi, Force Motors, Jaguar Land Rover, Isuzu, Mercedes which also did not meet the CAFÉ 1 norms for their respective sales-weighted average kerb weights.
Figure 3 gives the corporate sales-weighted average CO2 emissions and kerb weight with respect to the CAFÉ 1 targets for top 10 OEM’s. As can be seen, all the OEM’s shown are well below the target.
Out of the total of 25 Makes considered for this report, 18 Makes met the CAFÉ 1 norms while 7 Makes did not.
The Makes which are closest to bridging the delta from the CAFÉ 2 norms are BMW, Maruti Suzuki, Tata Motors, and Audi which need a single digit drop in their sales-weighted average CO2 emissions. Volvo is already at 2.8gms of CO2/km less than the CAFÉ 2 targets.
Why do you need the emissions DASHBOARD?
All vehicle manufacturers know their own current position.
What they may not accurately know is where their competition is at and what changes they are bringing into their portfolios to meet the CAFÉ 2 targets with respect to the sales weighted kerb weights of their individual variants.
Additionally, what CO2 reducing technologies competition is bringing into the mix so that the overall make level CAFÉ 2 targets are met? Who is taking advantage of the super-credits? What is the situation of the current CO2 credits/debits of the competition?
Link JATO-LMC forecast model and OEM’s can accurately predict whether who will hit and who will miss?
Slice the data at make group, make, model, version, body type, fuel type, and transmission level to understand the nuances the competition is making which may not be evident.
JATO Emissions Performance Dashboard will answer all the above questions.
And most importantly, dashboard provides the ability to add your own future vehicles with related specs and forecasted volumes to see the overall impact on CO2 and get an accurate projection of your make with respect to the CAFÉ 2 norms.
The discussion so far has been around hitting the targets and what needs to be done to get there. There has been no mention of consequences for missing them.
While the 2021 European Union emission norms are much tighter at 95 gms CO2/km, and non-compliance attracts severe penalties, it is not yet clear if any penalties exist for non-compliance by the Indian OEM’s.
It is not the question of ‘if’ but ‘when’ the Honourable Supreme Court of India brings out penalties for non-compliance to CAFÉ 2 targets in India. When this happens, OEM’s will begin to see a strong need of a tool that can allow to not only understand current reality but also predict what’s to come in form of penalties. This dashboard prepares you in advance.
It is going to be an uphill journey to the CAFÉ 2 norms and JATO expects to be right there with the OEM’s in supporting their climb.