Centre Notifies CAFE-3 Norms, Tightens Fuel-Efficiency Targets for Passenger Vehicles

Also Read | INDIA Bloc Meets Over Gyanesh Kumar, SIR Row; Sources Reject Attacks on Poll Panel

Add informalnewz.com as a Preferred Source

The Centre has notified the third phase of the Corporate Average Fuel Economy (CAFE-3) norms, introducing tighter fuel-efficiency and carbon-emission requirements for passenger vehicles sold in India. The new framework will come into effect on April 1, 2027, and remain applicable until March 31, 2032.

The rules set progressively stricter fuel-consumption benchmarks over the five-year period. They will apply to new passenger vehicles manufactured or imported for sale in India, while also offering manufacturers incentives for adopting cleaner fuels and more efficient technologies.

The revised framework is intended to encourage improvements in vehicle efficiency while recognising the growing weight of passenger vehicles and the role of alternative fuels.

CAFE-3 Norms to Take Effect From April 2027

Under the notified framework, the fuel-consumption benchmark will become more stringent each year between 2027–28 and 2031–32.

The benchmark is set to decline from 3.996 litres per 100 kilometres in 2027–28 to 3.3273 litres per 100 kilometres in 2031–32. This represents an improvement of approximately 16.7% over the five-year period.

The new targets will apply to new passenger vehicles manufactured or imported for sale in the Indian market.

The year-on-year tightening means vehicle manufacturers will need to improve the average fuel efficiency of their passenger-vehicle fleets to meet the prescribed requirements.

Also Read | INDIA Bloc Meets Over Gyanesh Kumar, SIR Row; Sources Reject Attacks on Poll Panel

Revised Targets Consider Vehicle Weight

One of the key changes in the new framework is the adjustment to the reference vehicle weight.

The reference weight has been increased from 1,082 kg under the existing norms to 1,229 kg under CAFE-3, a rise of around 13.6%.

According to the Ministry of Power, the revised target line has been flattened to create a more balanced, weight-sensitive approach. The framework provides relatively softer targets for lighter vehicles while requiring greater fuel-efficiency improvements from heavier vehicles.

This change reflects the shift towards heavier vehicles in the passenger-car segment.

The weight-based approach is intended to account for differences across vehicle categories while continuing to tighten overall efficiency requirements.

Incentives for Ethanol and Other Cleaner Fuels

The CAFE-3 framework also introduces incentives intended to encourage the use of cleaner fuels and technologies.

It recognises renewable and low-carbon fuels, including ethanol-blended petrol, biofuels and compressed biogas (CBG), through a Carbon Neutrality Factor (CNF).

The CNF is designed to account for the role of eligible fuels in reducing the carbon impact associated with vehicle use.

The framework also allows manufacturers to claim a concession of 1 gram of CO₂ per kilometre for each eligible technology, subject to an overall limit of 9.0 grams.

These provisions create additional compliance pathways for manufacturers adopting recognised technologies and fuels, alongside improvements in conventional vehicle efficiency.

What the New Rules Mean for Vehicle Manufacturers

The tighter benchmarks will require automakers to plan for continued improvements in fleet-level fuel efficiency during the 2027–2032 period.

Manufacturers will need to consider how vehicle weight, fuel type and technology choices affect compliance with the new targets. The incentives for eligible technologies and cleaner fuels may also influence product and technology strategies.

The revised weight-based approach is particularly relevant as the passenger-vehicle market shifts towards heavier models. Under the new framework, vehicle weight will remain an important factor in determining the applicable efficiency requirements.

The rules also recognise that cleaner mobility can involve more than improvements to conventional petrol and diesel engines, with specific provisions for ethanol-blended fuels, biofuels and CBG.

Also Read | INDIA Bloc Meets Over Gyanesh Kumar, SIR Row; Sources Reject Attacks on Poll Panel

CAFE-3 Norms: Key Details at a Glance

Frequently Asked Questions

1. What are the CAFE-3 norms?

CAFE-3 refers to the third phase of India’s Corporate Average Fuel Economy framework. It sets fuel-efficiency and carbon-emission requirements for passenger vehicles.

2. When will the new CAFE-3 rules come into effect?

The norms will take effect on April 1, 2027, and remain in force until March 31, 2032.

3. Which vehicles will come under CAFE-3?

The framework will apply to new passenger vehicles manufactured or imported for sale in India.

4. How much will the fuel-consumption benchmark improve under CAFE-3?

The benchmark will decline from 3.996 litres per 100 km in 2027–28 to 3.3273 litres per 100 km in 2031–32, an improvement of about 16.7%.

5. What is the Carbon Neutrality Factor under CAFE-3?

The Carbon Neutrality Factor recognises the role of eligible renewable and low-carbon fuels, including ethanol-blended petrol, biofuels and compressed biogas, under the new framework.

6. What incentives are available to manufacturers?

Manufacturers can receive a concession of 1 g CO₂/km for each eligible technology, subject to an overall cap of 9.0 g.

Also Read | INDIA Bloc Meets Over Gyanesh Kumar, SIR Row; Sources Reject Attacks on Poll Panel