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NGT shows red light to diesel vehicles
-Business Standard

Interim order stops registration of new diesel vehicles in Delhi

In a significant measure to curb the alarming pollution level, the National Green Tribunal on Friday issued an interim order that new diesel-run vehicles will not be registered in Delhi and there will be no renewal of registration of such vehicles which are more than 10-year-old. The tribunal also asked the Centre and Delhi governments to consider not buying diesel vehicles. The next hearing is scheduled for January 6.

“...it is important that the government should take a serious view and a decision whether any diesel vehicle, old or new, should be registered in Delhi,” a Bench headed by NGT Chairperson Justice Swatanter Kumar said, adding “as an interim measure and subject to hearing all parties in the case, we direct that diesel vehicles which are more than 10-year old and new diesel vehicles would not be registered in Delhi”.

On April 7, the panel had held that all diesel vehicles which are more than 10 years old would not be permitted to ply in Delhi-NCR.

Shares of automobile companies underperformed the market on Friday, with the BSE Auto index dropping 1.7 per cent compared to a 0.82 per cent decline in the benchmark Sensex. Among the major losers were diesel vehicle manufacturers, including Tata Motors, which fell nearly three per cent, while Mahindra and Mahindra (M&M) fell 2.23 per cent. Auto ancillary companies such as Bosch and Motherson Sumi, too, fell two per cent and three per cent, respectively. Indraprastha Gas stock, however, jumped 3.32 per cent.

The NGT’s order comes as the Delhi government braces to restrict the number of cars plying in Delhi by implementing an odd-even licence plate-based ban starting January. The panel said it may “encourage” people to buy two cars.

The move will impact most automobile makers, particularly M&M, Mercedes-Benz and BMW, as bulk of their sales come from diesel vehicles. The industry is unhappy. “Singling out a technology is not the right approach,” said Sugato Sen, deputy director general at the Society of Indian Automobile Manufacturers.

A marketing head with a leading car maker said the ban should have been on sale from manufacturer to dealers rather than preventing registration. “Decisions can be taken with some time frame rather than a surprise. What are dealers supposed to do with the stocks they are carrying?” he questioned. Excise has been paid on these vehicles, he added.

"Manufacturers are meeting the regulations laid down by government for manufacturing diesel vehicles. Diesel offers better fuel efficiency and emits less CO2 than petrol vehicles," Sen added.

In a statement late evening, Siam said the NGT order was not based on scientific facts or study. It said NGT should have waited for the study commissioned to IIT Kanpur by Delhi government. "BS IV diesel vehicles are very clean and it would be wrong to label them as unclean. It is not proper to stigmatise diesel technology based on misinformation spread by interested lobbies," it said and added the order would seriously jeopardise investments made by the industry and sought an opportunity to represent its views before the NGT.

There is no ban on registration in other cities around Delhi such as Gurgaon and Noida.

The NGT, in its order, said it will direct all public authorities, corporations, DDA, police and other public departments to prepare an action plan for phasing out diesel vehicles, particularly trucks. It asked the authorities to give an action plan by January 6.

Delhi is the sixth largest market for passenger vehicles and companies sold 182,115 vehicles in the year ended March. The total number of cars registered in Delhi stood at 2.6 million as of March 2015. It is estimated one of every three passenger vehicle sold in Delhi is diesel driven. Manufacturers are already saddled with excess diesel engine manufacturing capacity as there is a clear shift towards petrol vehicles at a national level. Maruti Suzuki, Honda and Hyundai invested in diesel engine capacities in the past four years, when the demand for diesel cars was high. An industry executive said diesel addresses the issue of energy scarcity in a nation like India that imports more than 70 per cent of its energy requirements. "Diesel offers 25-30 per cent higher fuel efficiency compared to petrol. If you stop sale of diesel vehicles, the country's energy consumption will go up," he said.  

To curb pollution, the NGT further announced a penalty of Rs 5,000 per event for burning waste in the open, dumping construction and other waste material in public places and on the river bed.