Hyundai Motor has dismissed media reports claiming the India unit of the Korean auto giant, along with seven other carmakers, may face massive emission penalty of nearly ₹7,300 crore for not complying with CAFE norms in the previous financial year. The report, published by several outlets, said that Hyundai led the group of eight carmakers facing the penalty with highest share followed by other big carmakers like Mahindra, Kia, Honda Cars among others. Hyundai issued an official statement terming the report as ‘fictional’.

The media reports had claimed that the carmakers will face penalty for failing to achieve the Corporate Average Fuel Efficiency (CAFE) norms on fleet emission which were tightened in 2022. The report assumed significance at a time when northern part of India, especially in Delhi and its surrounding neighbourhood, is under the grip of severe pollution. The reports also said that a final decision to implement the emission penalty on these eight carmakers is yet to be taken as discussions are underway between all stakeholders.

Emission penalty: Hyundai's reply

In its official statement, Hyundai said that the reports are based on extrapolation and is not based on facts. The statement read, “The report is based on extrapolations, which exercise itself based on the incorrect premise that the 2022 amendments to the Energy Conservation Act, 2001, prescribing stricter penalty norms compared to the preceding law, were effective prior to 1st January, 2023. Therefore, the story of penalty of quantum of penalty is more fictional than based on facts or laws applicable on facts."

According to the report, Hyundai could be asked to pay the bulk of the penalty worth nearly ₹2,837 crore, about 60 per cent of the annual profit the carmaker posted in FY2023.

It is important to note that carmakers in India had earlier made their point by raising question on slapping emission penalty on the entire fleet for vehicles manufactured in the last quarter of a year. The new CAFE norms set by the Bureau of Energy Efficiency, which falls under the Union Ministry of Power, was implemented from January last year. The Centre has not released the CAFE norms report for the FY2022-23 yet and discussions are on between the stakeholders to get more clarity amid objections raised by the carmakers.

CAFE norms: How it calculates emission violation

The CAFE norms were first introduced in India back in 2017. They are a set of rules that limit the amount of carbon dioxide that can be emitted by a car manufacturer's fleet in a single financial year. The rules were revised in 2022 with stricter norms kicking in. It says that all fleet should have fuel consumption of not more than 4.78 litres per 100 kms and carbon dioxide emissions of not more than 113 grams per km.

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