CAFE-3 norms for passenger vehicles notified: How it affects you
What's the story
The Indian government has notified new Corporate Average Fuel Economy (CAFE-3) norms, aimed at reducing carbon emissions from passenger vehicles. The new regulations will come into effect from April 1, 2027, and remain in force until March 31, 2032. Under these guidelines, the fuel-consumption benchmark will be gradually tightened over a five-year period.
Benchmark
Fuel-consumption benchmark to be gradually tightened
The CAFE-3 norms will see the fuel-consumption benchmark tighten from 3.996-liter per 100km in 2027-28 to 3.3273-liter per 100km in 2031-32.
This translates into an overall improvement of around 16.7% over the five-year period.
The new regulations will apply to all new passenger vehicles that are either manufactured or imported for sale in India, including electric and hybrid models.
Reporting requirements
Manufacturers will have to report CO2 emissions annually
Under the CAFE-3 norms, manufacturers will have to report their vehicles' CO2 emissions and actual fuel consumption annually.
This is aimed at ensuring compliance with the new regulations.
A system of credits and debits will be established for vehicle manufacturers based on their compliance levels.
The revised target line has also been flattened for a more balanced approach toward lighter and heavier vehicles.
Compliance pathways
Reference weight increased by 13.6%
The new framework under the CAFE-3 norms raises the reference weight from 1,082kg to 1,229kg.
This is a 13.6% increase and reflects the trend toward heavier vehicles in the passenger car segment.
The regulations also provide manufacturers with various incentives and compliance pathways to promote cleaner fuels and technologies.
These include ethanol-blended petrol, biofuels, and compressed biogas (CBG).
Concession
Concessions for cleaner fuels and technologies
Under the new framework, manufacturers can claim a concession of 1g CO2/km for each eligible technology, subject to an overall cap of 9g.
This is aimed at incentivizing the adoption of cleaner fuels and more efficient vehicles.
The gazette also sets carbon neutrality factors that discount a model's declared tailpipe CO2 for ethanol-blended petrol vehicles (E20 or higher blends) and flex fuel models.