Diesel tractors to get more expensive from January 2023 as BS TREM 4 norms kick in

The revised BS TREM 4 emission standards for diesel tractors that produce over 50 hp of power will become applicable from January 2023 onwards. The transition to revised emission norms is estimated to increase the cost of 50 hp and above category of tractors by 10-15 percent. However, an ICRA report states that OEMs are expected to gradually pass on the hike in cost to customers. Another shift due to the revised norms will be in OEMs realigning their portfolios with tractors that offer better torque at lower horsepower.Based on the 10-15 percent price hike, ICRA estimates that the production cost of a 50 hp category tractor would increase by up to Rs 1 to 1.3 lakh. However, 50 hp category tractors only comprise 7 to 8 percent of overall industry volumes, the majority of tractor sales come from the 30 to 50 hp category. With OEMs introducing lower horsepower and higher torque models, it is expected that the 41 to 50 hp segment of tractors will see a further boost from its FY 22 market share of 53 percent. The technological upgrades to meet the revised norms are readily available with OEMs, who export BS TREM 4 models outside the country. However, the matter has been lagging within the country as the new emission norms were initially slated to be implemented in October 2020 but the transition has been deferred multiple times due to the pandemic.The major upgrades required for the diesel tractors to pass TREM 4 standards include fuel injection systems, air handling systems, exhaust gas recirculation, diesel oxidisation catalysts, selective catalysts reduction systems and diesel particulate filters. Out of these categories, the engine air and fuel control upgrades are expected to comprise of 80 percent of the incremental costs.