30% green tax on diesels?

[kaiserketkar]

After the the odd even rule, ban on diesel cars above 2000cc and on the transit entry of commercial vehicles in Delhi, there is a new proposal in the offing. The Environment Pollution Control Authority (EPCA) has suggested that a green tax of 30% be imposed on diesel vehicles to check their numbers and toxic emissions. The Supreme Court is going to take up a day long hearing on 30 Apr to decide on the matter of diesel vehicles and how to control pollution. This is aimed at making diesel vehicles unattractive to the prospective customer, thereby reducing the number of units sold.
As it stands today, diesel vehicles are around Rs 1 lac costlier than their petrol counterparts. This leads to a thumb rule that if one's driving is ~1000kms/mth, then it will justify the higher cost paid for a diesel vehicle. With the cost difference between diesel and petrol reducing, diesel cars became even more unviable. And now this proposed tax will most likely be the final nail in the diesel coffin.

To give you an idea of what this actually means-
The recently launched Tata Tiago top petrol & diesel variants cost Rs 5 lac and Rs 5.8 lac respectively. With the green tax, the prices will become Rs 5 lac and Rs 7.5 lac!
The Honda City costs Rs 11.7 lac & Rs 13 lac for VX variant in it's petrol & diesel avataar. This will change to Rs 11.7 lac [petrol] & Rs 17 lac [diesel]!!!
The Mahindra XUV500 in it's Delhi special version with a 1.99L engine W10 AWD AT will cost a whopping Rs 23.4 lac

[Shreyans]

This whole argument is screwed. Diesel has been decontrolled, so there is no issue of subsidy anymore. As for pollution, the matter will become redundant the moment they switch to Euro6 norms, where standards are identical for both petrol and diesel engines. It makes sense for auto makers to suck up and put all efforts into complying with Euro6 asap. This is the only way forward which is beneficial to all stakeholders as well as the environment

[kaiserketkar]

It's a good thing that the SC is seriously looking into the pollution levels in Delhi, because so many governments have failed to really accomplish anything. I have, however a few points to ponder on this topic:

1. There are lacs of diesel cars already on the road. Does the govt/court have any plans for these vehicles? If they're allowed to ply for the duration that they're legally entitled to [10 years], then it'll be at least around 7-8 years before we start seeing any change on the road.
2. Transport almost entirely depends on diesel. What about that?
3. Pollution from petrol & diesel engines [including two wheelers, cars, commercial vehicles] account for around 22-29% of total pollution, as per various studies. Generators cause 12% of the SPM, while industries & brick kilns around Delhi share 26% of the blame for the pollution. What is being done to tackle this?
4. It's not enough looking within Delhi. The areas around Delhi have a lot of industries and other sources of pollution. They too contribute to the problem. Will they be allowed to continue?
5. And finally, what plans does the govt/ court have for the 30% green tax and other 'pollution' taxes that will be levied on Delhi-ites? Is there a going to be a proper channelling of these funds for tackling pollution, or will they dissappear in the bureaucratic maze?

The measures taken so far for Delhi's pollution are nothing more than a band-aid over a fracture. More 'big picture' and long term measures are needed.

[Roshun]

Diesel cars in Delhi will continue to run until they are 15 years old because the govt could not figure out a way to refund 5 years of road tax, if they forced them to pull out at 10. Which means you still have some BS 2 diesels on the road.
Hiking tax on diesels by another 30% is only going to slow down the shift. Instead, incentives to swap non-BS 4 diesels for newer ones may have been a better idea. Because now you will prevent adoption of cleaner diesels but let the earlier gen dirtier ones ply. There will also be an increase in vehicles registered in other states and unless Delhi clamps down like Karnataka on that, the purpose will be defeated.
In all this, trucks, generators and brick kilns continue to blow smog into the air, while the govt goes after a smaller part of the problem.

[kaiserketkar]

Diesel cars in Delhi will continue to run until they are 15 years old because the govt could not figure out a way to refund 5 years of road tax, if they forced them to pull out at 10. Which means you still have some BS 2 diesels on the road.

Oh?! In that case, it'll be at least 10 years before we start seeing a perceptible change in the diesel- petrol ratio.
Damn right, it'll slow down the very change that the govt wants.

When it comes to counting, they're confusing the sale of new cars with the actual cars on the road.

[n00b]

Owning a diesel car will soon become a crime.

[kaiserketkar]

This whole argument is screwed. Diesel has been decontrolled, so there is no issue of subsidy anymore. As for pollution, the matter will become redundant the moment they switch to Euro6 norms, where standards are identical for both petrol and diesel engines. It makes sense for auto makers to suck up and put all efforts into complying with Euro6 asap. This is the only way forward which is beneficial to all stakeholders as well as the environment

Absolutely Shreyans,
Instead of going after a particular fuel, they should go after the emissions. speed up the implementation of Bharat VI.
According to the Centre for Science and Environment, the move to Bharat Stage-VI will bring down Nitrogen Oxide emissions from diesel cars by 68 per cent and 25 per cent from petrol engined cars. Cancer causing particulate matter emissions from diesel engined cars will also come down by a phenomenal 80 per cent. This might make those diesel cars pollute less than the petrol cars that are currently being patronized.

Alternately there could be some sort of an incentivisation. A reduced tax for those cars that satisfy Bharat VI norms. Car cos are already making Euro 6 engines for the foreign market [a lot of them right here in India and exporting them], so it's just a matter of switching the cars sold in India to that engine.

The other aspect however is the availability of Bharat VI fuel. Do the refineries have the capability to supply Bharat VI fuel to the NCR?

[Shreyans]

The other aspect however is the availability of Bharat VI fuel. Do the refineries have the capability to supply Bharat VI fuel to the NCR?[/SIZE][/FONT][/COLOR]

Refiners insist that they cannot supply Euro 6 fuel any time before 2019, and that too only in limited cities.

If the courts can take stern action again auto manufacturers, they can also pressurize the refiners into pulling their socks up. BS6 cars are no good without BS6 fuels.

Patronizing a particular fuel or enforcing arbitrary restrictions based on length or cubic capacity will not give results. The only way forward is tighter emission norms with full compliance. At the same time, other major sources of pollution must also be tackled at a war footing.

[Roshun]

The Court has refused to let diesel cars with engine capacity of over 2 litres be sold in the Delhi NCR region. This has had many repercussions.

1. Cabs are protesting because diesel cabs are banned in the Delhi NCR region. All were asked to convert to CNG by April 30. That is a seemingly difficult ask - given that it involves significant invesment for cabbies to change to CNG cabs. You can't "convert' a diesel cab to CNG - you have to put in an all new petrol engine, or rather, buy a petrol cab and convert it to CNG.

2. Police and govt bodies are exempt from the 2 litre rule. The cops have just bought a new fleet of Innovas (2.4 litre diesel engine). I could be mistaken though, because the Innova is also available in a 2 litre petrol with CNG (wonder if the cops have picked those).

3. Mahindra has been smart, it quickly launched the "NCR edition" Scorpio and XUV500 with 1997 cc diesel engines instead of 2.2 litre engines (very minor mechanical modification involving reducing the stroke length of the piston, by shortening the connecting rods).

4. Mercedes has sent a letter to the Transport Ministry saying that their cars can be run on 100% biodiesel (the fact that bio-diesel is unavailable is a different matter). This is in follow up to a proposal by the Transport Ministry to allow diesel cars that run on 100% bio diesel. This seems a logical step, but where does one get bio diesel?

5. Car makers such as Tata, Toyota, Ford and others who have large diesels are in a quandary. The NCR market is a pretty significant one in size to ignore.

6. Some dealers have found ways to circumvent the ban by getting vehicles registered in Uttarakhand, Punjab and interior UP.

The down side of this ban is that resale value of older diesel cars has gone up. You can still drive an old BS1, BS2, or BS3 diesel in the NCR region, but you can't buy a new cleaner BS4 one? Flawed logic? Definitely. Given that BS4 vehicles are supposed to be 80% cleaner than the BS3 ones, there's something seriously wrong with this ban.

And here is SIAM's response to the diesel ban. I am reproducing the entire text of the press release here:

>>29^th April 2016, New Delhi- Society of Indian Automobile Manufacturers (SIAM), the apex Industry body representing leading vehicle and vehicular engine manufacturers in India today has put forward some of the facts with reference to the Ban being exercised by the Supreme Court on diesel passenger cars of 2000cc and above engine capacity.

As per the study conducted recently by IIT Kanpur which indicates that all types of Passenger Cars as a whole contribute to only 2% of the PM 2.5 pollution load in NCT. Out of this 2%, all diesel cars are estimated to contribute only 1.5% of the PM 2.5 pollution load. Further BS-IV diesel cars contribute only 0.5 % of PM 2.5 emissions.

All diesel cars being manufactured today are compliant to the current emission norms set by Government of India, Compliant vehicles can never be considered as “polluting”, and the “polluter pays” principle cannot be applied, unless there is a violation of the notified emission norms. The automotive industry has made significant investments in diesel technology which are in accordance with the Investment Policies of Government. As such, putting any restrictions or bans on a legally compliant industry tantamount to an infringement of the fundamental right to do business in the country.

According to SIAM, ban on diesel vehicle is not going to achieve the desired objective of reducing pollution, but will vilify diesel technology which has gone through a major transformation over the last 15 years and today is highly clean, as well as energy efficient. A ban on BS IV diesel cars legally encourages old and highly polluting vehicles not meeting the current emission norms, to continue plying on the road, while not allowing new vehicles compliant with current emission norms to be used. This is contra to the objective of the ban. It also gives an impression that there is no stability or predictability in the policy regime which will deeply dent the country’s global image as an investment destination and the ‘Make in India’ priority. Many auto MNCs have already taken a decision to freeze further investments in India until complete clarity is achieved on key policy issues which can have a bearing on their business prospects in India.

The auto industry with a total size of approximately Rs. 600,000 crores contribute almost half of the Manufacturing GDP of the country and employs more than 31 million persons direct and indirect. According to Government’s Automotive Mission Plan (AMP), the auto industry has the potential to employ a further 65 million persons in the next 10 years. The task before Government now is to arrive at a unified stand on major policy issues like the diesel case and clarify the policy to the Courts, as well as globally.<<