After wranglings between the power and transport ministries, the government has now decided to notify fuel efficiency standards for auto makers under the Energy Conservation Act which will come into force from January next year.
"The standards will be notified under the Energy Conservation Act 2002 by the Bureau of Energy Efficiency and not under the Motor Vehicle Act," environment minister Jairam Ramesh said at the Society of Indian Automobile Manufacturers (SIAM) summit here.
This has been decided, he said, "after considerable wranglings between different ministries and inhibition by the automobile sector.
"And since technical work has been done. Only fine-tuning is remaining. I would urge SIAM to work with the power and surface transport ministries to work with the clear objective of moving towards mandatory fuel standards from January next year."
For quiet sometime, the matter had been a bone of contention between the power and the road transport and highways ministries.
The SIAM has agreed to move towards voluntarily labelling from October this year under which all of its members declare mileage of their vehicles certified by the Automotive Research Association of India.
However, Ramesh felt that it was high time that the automobile industry move at the earliest from the voluntary regime to the mandatory fuel efficiency standards regime in the absence of which it is expected to be a major contributor to the country's total green house gas emissions.
"I had been fighting all along that we must move from voluntary to mandatory regime of fuel efficiency standards. If the US could do it... President Obama has done it even though he had legislation problem, he used the Environment Protection Act to move into the regime of mandatory fuel efficiency standards. Let's also quickly do that," he said.
Presently, the transport sector contributes about 15 to 20% of the country's total greenhouse gas emissions.
"But the rate at which the automobile sector is growing our own estimations are that by the year 2025-30 it could account close to 25% of our GHG emissions."
"Hence not only because of the air pollution point of view but also the climate change point of view, environment-friendly transportation assume special importance," the minister said.