Context
The Centre has notified the Corporate Average Fuel Efficiency (CAFE-III) norms for passenger vehicles for 2027–32. The norms tighten fleet-average fuel-consumption targets while providing compliance incentives for electric, hybrid, flex-fuel and biofuel-based vehicles.
Explanation
- CAFE norms regulate the average fuel consumption of the entire fleet of passenger vehicles sold by a manufacturer, rather than prescribing the same limit for each individual model.
- They broadly apply to M1 category passenger vehicles, including hatchbacks, sedans and utility vehicles.
- CAFE-III will operate from 1 April 2027 to 31 March 2032.
- The fuel-consumption benchmark tightens from 3.996 litres/100 km in 2027–28 to 3.3273 litres/100 km in 2031–32, implying about 16.7% improvement.
- Fleet fuel consumption is calculated using the Modified Indian Driving Cycle (MIDC).
- Battery Electric Vehicles (BEVs) receive enhanced compliance credit, while hybrids, flex-fuel vehicles, biofuels and efficiency technologies receive specified credits.
- CAFE norms mainly target fuel efficiency and CO₂ emissions, whereas BS-VI norms primarily regulate pollutants such as NOx and particulate matter.
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