Auto Sector Consensus on CAFE-III Emission Norms

Auto Sector Consensus on CAFE-III Emission Norms

Context: The Indian auto industry has reached a broad consensus on the proposed CAFE-III norms for 2027, which aim to regulate carbon emissions through a flatter compliance curve and revised rules, including removal of relaxations for lighter vehicles.

CAFE (Corporate Average Fuel Efficiency) Norms (What & Example):

  • CAFE norms are government rules that require automobile companies to ensure that the average fuel efficiency and COâ‚‚ emissions of all vehicles they sell remain within prescribed limits.
  • Example: If a company sells fuel-intensive SUVs, it must balance them by selling more fuel-efficient or electric vehicles so that its overall fleet meets the emission standards.
  • CAFE norms regulate average fuel consumption and COâ‚‚ emissions of a manufacturer’s vehicle fleet.
  • They are implemented by the Bureau of Energy Efficiency (BEE) under the Ministry of Power in India.
  • CAFE norms aim to reduce fuel consumption, lower emissions, and improve energy security.
  • CAFE-I and CAFE-II phases have already been implemented with progressively stricter emission targets.
  • CAFE-III proposes emission targets based on grams of COâ‚‚ per kilometre, linked to vehicle weight.

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