CAFE-3 Norms: Corporate Average Fuel Efficiency Standards for Cleaner Mobility

Subject: GS 03: Economy

Context: The Centre has notified the third phase of Corporate Average Fuel Efficiency (CAFE-3) norms.

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About Corporate Average Fuel Efficiency (CAFE) Norms

• CAFE is a regulatory framework that sets fleet-average fuel-efficiency and CO₂-emission standards for passenger vehicles manufactured or imported for sale in India. 
• Regulatory Basis: Notified by the Ministry of Power under the Energy Conservation Act, 2001, with implementation support from the Bureau of Energy Efficiency (BEE).
• Fleet-Based Approach: Compliance is assessed based on the weighted average efficiency of an automaker’s entire vehicle fleet, rather than each vehicle individually.
• Objective: To improve fuel efficiency, reduce CO₂ emissions and crude-oil consumption, and promote cleaner vehicle technologies.

Key Features of CAFE-3 Norms

• Stricter Fuel-Efficiency Target: The fleet fuel-consumption benchmark will progressively decline from 3.996 litres/100 km in 2027–28 to 3.3273 litres/100 km in 2031–32, requiring manufacturers to improve overall fleet efficiency.
• Reference Vehicle Weight: CAFE-III uses 1,229 kg as the reference vehicle weight for determining efficiency targets.
• Higher Weightage for Cleaner Vehicles: To encourage cleaner mobility, certain vehicles will be counted as more than one vehicle in the fleet calculation —
  • BEV/Range-Extended EV: 3; Plug-in Hybrid/Flex-fuel Strong Hybrid: 2.5; Strong Hybrid: 1.6; Flex-fuel Ethanol Vehicle: 1.1.
• Carbon Neutrality Factor (CNF): The norms provide emission reductions for vehicles using ethanol-blended petrol, flex-fuel ethanol, CNG/CBG and biofuel-blended diesel, recognising the contribution of lower-carbon fuels. 
• Efficiency Technology Credits: Manufacturers can claim 1 g CO₂/km reduction for eligible technologies such as start-stop systems, tyre-pressure monitoring, regenerative braking, efficient alternators, LED lighting and electric water pumps, subject to an overall 9 g CO₂/km cap.
• CAFE Credit Mechanism: Manufacturers meeting or exceeding the prescribed efficiency requirements can earn CAFE credits, while those falling short accumulate debits/deficits.
• Credit Trading and Buyout: CAFE credits can be carried forward or traded, while deficits can be offset through credit purchases from the Bureau of Energy Efficiency (BEE).
• Rising Buyout Price: The credit-buyout price will increase from ₹2,500/g CO₂/km in 2027–28 to ₹4,500/g CO₂/km in 2031–32.
• Measurement Method: Fleet-average fuel consumption will be calculated using the Modified Indian Driving Cycle (MIDC) and expressed in petrol-equivalent litres per 100 km.
  • Modified Indian Driving Cycle (MIDC) is a standardised testing procedure used to measure the fuel efficiency and CO₂ emissions of vehicles under simulated driving conditions. 

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News Source: The Hindu

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