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Govt may fine carmakers missing fuel efficiency targets under new rules
The government reportedly plans to fine carmakers that do not meet fuel efficiency rules; Bureau of Energy Efficiency (BEE) will check compliance
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3 min read Last Updated : Aug 27 2025 | 11:53 PM IST
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The government has reportedly introduced draft rules to penalise carmakers that fail to meet India’s fuel efficiency and emissions targets. The move aims to close a legal gap despite the Energy Conservation (Amendment) Act, 2022 already allowing for penalties.
According to a report by The Economic Times, the Ministry of Power has released the Energy Conservation (Compliance Enforcement) Rules, 2025. The draft grants authority to the Bureau of Energy Efficiency (BEE) to track compliance with Corporate Average Fuel Efficiency (CAFE) norms and forward violations to state electricity regulatory commissions (SERCs) for penalty decisions.
Why it matters
India’s automotive sector is under rising scrutiny to cut emissions. Eight major carmakers reportedly breached fuel consumption and emission limits in 2022-23, which could lead to ₹7,300 crore in fines. The new draft rules would formalise enforcement and help route penalties into the Central Energy Conservation Fund (CECF), with up to 90 per cent allocated to states based on local sales.
This policy shift could also intensify the push for cleaner production and faster adoption of energy-efficient technologies across the sector.
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