Tata’s have a tough road to tread ahead as they complete the acquisation of Jaguar and Land Rover. The brands are set to face stiff penalties if they dont ‘clean’ themselves up. The average carbon dioxide emissions from the car of both brands are much higher than those stipulated in the proposed European Commission (EC) norms, which will be in effect from 2012. Tata will complete the acquisition by the end of this june and this will be a big headache for the Indian Automobile major.

Don June, director (corporate and government affairs) for Jaguar and Land Rover did mention that steps were being taken to keep pace with the new CO2 emission norms and the company plans to reduce the overall CO2 emission for all its car  by 18% over the next few years.

The company has set aside a huge budget (700 million pounds) to develop and implement new enviromently friendly technolgies and also look for new manufaturing materials. “A whole lot of technologies are being worked out including biofuels and hybrids. We are also looking at getting in light-weight structure for manufacturing our cars, further developing on Jaguar’s expertise in aluminum body structures,” Hume added.

EC has taken to a new initiative aimed at reducing carbon dioxide emission from new cars by upto 19%. A proposal for legislation of the same was adopted in december last year. The proposal aims at reducing the green house gas emissions and meet the kyoto protocol targets,  and will reduce the average CO2 emission from new passenger cars in Europe from around 160 gms to 130 gms per kilometer by 2012.

The draft legislation defines a limit value curve of permitted emissions of CO2 for new vehicles according to the mass of the vehicle. The curve is set in such a way that heavier cars will have to improve more than lighter cars. And manufacturers will be able to make cars with emissions above the limit of value curve, provided these are balanced by cars that are below the curve.

While JLR could have offset higher CO2 emission of its fleet by balancing it by Ford’s fleet of light low-emission cars, the same is not possible under Tata Motors as it does not sell cars in Europe. Tata Motors also faces a proposed penalty, or the “excess emissions premium”, that companies have to pay for going over the stipulated curve. A premium of 20 euros per gm/km has been proposed in the first year (2012), gradually rising to 35 euros in the second year (2013), 60 euros in the third year (2014) and 95 euros by 2015.

Meeting regulations is a major challenge for the company considering the fact that the most fuel efficient car in the Jaguar, Land Rover portfolio, the X-type currently emits around 149 g/km which is way above the stipulated  new norms said Hume.

A spokesperson for Tata Motors said from Mumbai that the company was always aware of the new proposed norms. “It does not come as a surprise to us. This is an issue that has been in discussion for the past few years and Tata Motors is aware of it,” the spokesperson said

Source: Economic Times