New Delhi, July 16 (APAC Media): The Ministry of Power has released draft CAFE-III norms.
The new rules could reshape India’s fuel efficiency and clean technology roadmap.
A public consultation window is now open, giving the auto industry a chance to weigh in before the framework is finalised.
What the Draft Proposes
The norms are set to apply to M1 category passenger vehicles manufactured or imported for sale in India between 2027-28 and 2031-32, replacing the existing CAFE-II framework, which is due to lapse on March 31, 2027.
For the first time, the draft introduces carbon neutrality factors that recognise ethanol, biofuel, and compressed biogas, allowing manufacturers to specify reductions in declared tailpipe carbon dioxide emissions before compliance is assessed. Current ethanol blending levels will attract an 8% carbon neutrality factor, while CBG and biofuel reductions will be tied to actual blending levels achieved.
Tightening Targets, Built-In Flexibility
Fuel consumption targets will tighten progressively, moving from 3.996 litres per 100 km in 2027-28 to 3.3273 litres per 100 km by 2031-32, giving automakers a phased runway rather than a sudden compliance cliff.
To ease the transition, the draft introduces super credits for cleaner technologies—battery electric and range-extended electric vehicles will count as three vehicles for compliance purposes, plug-in hybrids and flex-fuel strong hybrids will carry a 2.5 multiplier, strong hybrids 1.6, and flex-fuel ethanol vehicles 1.1.
A credit and debit mechanism will also let manufacturers who outperform their targets carry forward compliance credits within prescribed blocks, with unutilised credits from BEE priced at Rs 2,500 initially and rising by Rs 500 annually.
Why It Is Important
As a result of this drive, India’s capital is trying to reduce reliance on crude oil imports and make the automotive industry comply with its climate change policy. The exemption from this policy applies only to small automobile makers, producing fewer than 1,000 passenger vehicles each year.
The industry itself remains split—smaller and larger vehicle manufacturers are reportedly taking contrasting positions on how the compliance curve should be structured, setting the stage for a contested consultation period before the August 6 deadline.
Whether CAFE-III strikes the right balance between ambition and affordability will likely determine how smoothly India’s auto industry navigates its next fuel-efficiency cycle.
