core sector communique

Proposed fuel economy standards a complete sell-out, says CSE

• Bureau of Energy Efficiency (BEE) releases proposed fuel economy standards for cars -- CSE lambasts them as too little too late.
• The standards require car manufactures to do nothing until 2015 and only a marginal improvement thereafter.
• Ask for very low rate of improvement -- much lower than what the car industry has already achieved without regulations.
• CSE demands a review and public consultation on the proposed standards to make them more stringent.
• This is needed for effective fuel savings and cutting emissions from luxury consumption of cars.

New Delhi, October 21, 2011: Centre for Science and Environment (CSE) has strongly criticised the proposed fuel economy standards for passenger cars, released here today by the Bureau of Energy Efficiency (BEE). These standards were being debated since 2006, but the outcome, say CSE researchers, have been far from satisfactory.

Said Anumita Roychowdhury, CSE’s executive director-research and head of its air pollution team: “It is shameful that when the country is facing a serious energy crisis and passenger cars are expected to drive the transport fuel demand at an enormous cost, the government -- under pressure from the car industry -- has agreed to maintain status quo.”

What’s gone wrong with the proposed standards?

Very weak and status quo: In 2010, the Indian car industry had already achieved fuel consumption levels of 6 litre per 100 km. But the application of the proposed standards to available data for car sales and fuel economy show that the proposed standards are asking the car industry to come down to only 5.73 litre per 100 km in 2015, and to 5.14 litre per 100 km in 2020. This means less than 1 per cent reduction per year until 2015 and 2.2 per cent reduction thereafter until 2020. The new standards are being set as corporate average fuel consumption (CAFC) standards.

The industry has already achieved a better rate of improvement than those proposed by the standards: Between 2007 and 2010, the car industry has already improved its average fuel economy from 6.53 litre per 100 km to 6 litre per 100 km in 2010 – an improvement of 2.8 per cent a year. Then why are the proposed standards asking the car industry to meet a target of only 0.8 per cent improvement year between 2010 and 2015 and 2.2 per cent between 2015 and 2020, asks CSE. Says Roychowdhury: “The government has clearly capitulated under pressure from the car industry to create a lax margin for bigger and more inefficient cars.”

Some carmakers will get away by not doing anything at all for the first few years. Estimates from available data show that some of the car majors in India like Tata Motors and Hyundai are well within the proposed standard line and will not have to do anything for five years. Over 10 years, they will have to achieve approximately only 1 per cent improvement. Maruti Udyog Ltd will have to improve by about 2 per cent over 10 years.

The standards will barely allow any fuel savings: The proposed standards have stated that if nothing is done about regulating fuel economy, car fuel consumption will increase from 9 million metric tonne in 2010 to 25 million metric tonne in 2020. Yet India’s own standards are so weak that fuel savings will be negligible – only 3 million metric tonne by 2020: just 12 per cent savings. But if the car industry is made to achieve a minimum of 2 per cent improvement a year, the fuel consumption can be halved by 2020, points out CSE.

India ‘plans’ to slide behind all major car producing countries by 2020 – even behind US and China. India, by an act of policy, is aiming to finish the worst in the world despite starting from one of the best baselines in 2010! India has already begun with a much better fuel economy baseline than most other vehicle producing countries. But with the proposed targets, India will finish behind all of them in 2020 (see pointers below). India will show up very poorly in the ongoing international climate negotiations if its fuel economy target worsens than that of the US and China despite starting at a level better than them. This will make a mockery of the National Climate Action Plan of the Prime Minister’s Council.

It will be humiliating if public policy allows such slow improvement in CO2 emissions and fuel savings from the luxury consumption of cars. This is not acceptable either under the principles of climate justice or that of energy security. India should at least close the gap with China’s targets in 2020.

Comparison of the fuel economy improvement (interpreted as CO2gm/km) target of key vehicle producing regions:

* European Union: 145 in 2010 -- 95 in 2020

* United States: 187 in 2010 -- 121 in 2020

* China: 179 in 2010 --117 in 2020

* Japan: 130 in 2010 -- 105 in 2020

* India: 141 in 2010 -- 122 in 2020

(See cse website for details)

India could have done a lot better: The new proposal is not building on the inherent advantage that India has in its small engine, low power and weight. The European Union, with a much heavier car fleet with an average weight of 1,300 kg (fuel efficiency affects fuel economy), is setting a more ambitious standard of 95 gm/km in 2020. But India, with an average weight of 1,050 kg today and with a better baseline emissions/fuel economy, is setting abysmally weak standards.