CAFE hits a new flashpoint as carmakers split on easy route for laggards

Earlier this month, the government had released a draft of changes in the ongoing CAFE 2 round to introduce a credit-debit system that would help carmakers avoid stiff penalties by buying credits either from their peers in mutually-agreed trades or at a flat ₹2,500 per g Co2/km rate from the regulator. These transactions would go into a ‘compliance passbook’. Non-compliance with the norms would lead to an estimated penalty of ₹5,000 per g CO₂/km.

With Tata Motors writing to the power secretary three days before the meeting, an executive involved in the discussions said there is now confusion over the stance, as the carmakers earlier had a consensus on this mechanism.