New CAFE 3 Draft Eases Emission Norms

The latest draft of Corporate Average Fuel Consumption Stage 3 norms introduces a softer approach to emission targets, offering broader relief across vehicle segments. The revised proposal particularly benefits small cars through a flatter emission curve, even as a previously proposed specific relaxation has been removed.

The updated draft keeps the original formula intact but modifies key constants, resulting in less stringent compliance requirements for automakers.

Revised CAFE 3 norms bring softer emission targets

Key formula changes reshape emission curve

The new CAFE 3 draft retains the same formula for calculating fuel efficiency targets but alters the constants that define the curve. The multiplier has been reduced, the reference vehicle weight has been increased, and the baseline fuel consumption level has been raised.

Specifically, the multiplier has been lowered from 0.002 to 0.00158 in the first year. The reference weight has increased from 1,170 kg to 1,229 kg, while the baseline consumption level has gone up from 3.7264 to 3.9960 litres per 100 km for 2027 to 28.

Flatter curve allows higher emissions

These adjustments shift the emission curve upward and make it flatter. As a result, manufacturers are allowed slightly higher emissions for the same vehicle weight compared to the earlier draft released in September.

In practical terms, the revised norms reduce the compliance gap, meaning automakers will require fewer efficiency improvements to meet the targets.

Small cars benefit more from revised structure

Since emission targets are linked to vehicle weight, the impact varies across segments. Smaller cars, which fall below the reference weight, gain more from the relaxed curve. Larger vehicles and SUVs also benefit, though to a lesser extent.

Earlier small car relief removed

The September draft had proposed a direct benefit of 3 g CO2 per km reduction for sub 4 metre petrol cars, with a cap of 9 g per km per model annually. This provision has now been removed in the updated draft.

Instead, the benefit has been absorbed into the revised curve itself, making the relaxation more uniform across categories rather than offering a targeted advantage to small cars.

Changes to super credits and compliance structure

The draft also revises the super credits system, which allows certain vehicle technologies to be counted at a higher value for compliance. The benefit for strong hybrid vehicles has been reduced compared to the earlier proposal.

Similarly, the factor assigned to flex fuel vehicles has been trimmed. However, incentives for battery electric vehicles and plug in hybrids remain unchanged, indicating continued support for electrification.

These changes aim to balance technological incentives while maintaining overall flexibility in meeting emission targets.

CAFE norms remain central to India’s emission strategy

CAFE norms play a key role in reducing fuel consumption and lowering emissions from passenger vehicles. Introduced under the Energy Conservation Act, 2001, these regulations apply to M1 category vehicles, which include passenger cars with up to nine seats and a maximum weight of 3,500 kg.

The revised CAFE 3 norms are scheduled to come into effect from April 1, 2027, giving automakers time to adapt to the updated framework.

Conclusion

The new CAFE 3 draft signals a shift toward more flexible emission norms, with a flatter curve that benefits small cars and reduces compliance pressure on manufacturers. While targeted incentives have been removed, the broader easing across segments ensures a balanced approach as the industry prepares for stricter efficiency standards in the coming years.