{"id":2325,"date":"2026-09-30T08:32:35","date_gmt":"2026-09-30T08:32:35","guid":{"rendered":"https:\/\/newsraise.com\/in\/2026\/09\/30\/india-cafe-iii-fuel-efficiency-norms-2027-32\/"},"modified":"2026-09-30T08:32:35","modified_gmt":"2026-09-30T08:32:35","slug":"india-cafe-iii-fuel-efficiency-norms-2027-32","status":"publish","type":"post","link":"https:\/\/newsraise.com\/in\/2026\/09\/30\/india-cafe-iii-fuel-efficiency-norms-2027-32\/","title":{"rendered":"India&#8217;s CAFE III Fuel Efficiency Norms Set 2027-32 Targets, Boost EV Credits"},"content":{"rendered":"\n<!-- Quick Adsense WordPress Plugin: http:\/\/quickadsense.com\/ -->\n<div class=\"9fece8afa224fd09e54b043d0febfb58\" data-index=\"1\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<!-- NR ATF -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-8898941184964366\"\r\n     data-ad-slot=\"4839033563\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<p>The Ministry of Road Transport and Highways (MoRTH) has released the third phase of Corporate Average Fuel Efficiency (CAFE) norms, known as CAFE\u202fIII, for passenger cars classified under the M1 category of the Central Motor Vehicle Rules, 1989. The regulations will be in force from 1\u202fApril\u202f2027 until 31\u202fMarch\u202f2032, and they prescribe a detailed framework for measuring, reporting and complying with fuel\u2011consumption standards across the automotive sector.<\/p>\n<h2>Scope and Timeline<\/h2>\n<p>The CAFE\u202fIII notification applies to all manufacturers of M1\u2011category motor vehicles, which include most passenger cars sold in India. Under the rules, each manufacturer must ensure that its annual average actual fuel consumption does not exceed the prescribed standard for every fiscal year within the five\u2011year period. The specific fuel\u2011consumption targets are expressed as two parameters, \u201ca\u201d and \u201cc\u201d, for each assessment year:<\/p>\n<ul>\n<li>2027\u201128: a\u202f=\u202f0.00158, c\u202f=\u202f3.9960<\/li>\n<li>2028\u201129: a\u202f=\u202f0.00152, c\u202f=\u202f3.8600<\/li>\n<li>2029\u201130: a\u202f=\u202f0.00148, c\u202f=\u202f3.7585<\/li>\n<li>2030\u201131: a\u202f=\u202f0.00139, c\u202f=\u202f3.5313<\/li>\n<li>2031\u201132: a\u202f=\u202f0.00131, c\u202f=\u202f3.3273<\/li>\n<\/ul>\n<p>Manufacturers must keep their actual average fuel consumption at or below the relevant standard for each fiscal year beginning 1\u202fApril\u202f2027. The norms also define a compliance block structure: the first block covers three years (2027\u201128 to 2029\u201130) and the second block covers the remaining two years (2030\u201131 to 2031\u201132). Credits and debits that arise within a block can be carried forward only within that block; any unused credits lapse at the block\u2019s end.<\/p>\n<h2>How Fuel Consumption Is Measured<\/h2>\n<p>Actual fuel consumption for each model will be derived from its type\u2011approved tailpipe carbon\u2011dioxide (CO\u2082) emissions, expressed in grams per kilometre (g\u202fCO\u2082\/km). The Gazette specifies conversion multipliers that translate CO\u2082 emissions into litres per 100\u202fkm for conventional fuels, or kilograms per 100\u202fkm for compressed natural gas (CNG):<\/p>\n<ul>\n<li>Petrol: 0.04217\u202f\u00d7\u202fCO\u2082 (L\/100\u202fkm)<\/li>\n<li>Diesel: 0.03776\u202f\u00d7\u202fCO\u2082 (L\/100\u202fkm)<\/li>\n<li>LPG: 0.06150\u202f\u00d7\u202fCO\u2082 (L\/100\u202fkm)<\/li>\n<li>CNG: 0.03647\u202f\u00d7\u202fCO\u2082 (kg\/100\u202fkm)<\/li>\n<\/ul>\n<p>In addition to these base calculations, the norms incorporate carbon\u2011neutrality factors that discount the declared tailpipe CO\u2082 for vehicles using biofuels. The discounts are:<\/p>\n<ul>\n<li>8\u202f% for ethanol\u2011blended petrol (E20 or higher), including strong and plug\u2011in hybrids<\/li>\n<li>22.3\u202f% for flex\u2011fuel ethanol vehicles<\/li>\n<li>5\u202f% or the CBG blending percentage notified by the Ministry of Petroleum and Natural Gas, whichever is higher, for CNG vehicles<\/li>\n<li>The actual biofuel blending percentage set by the Ministry of Petroleum and Natural Gas for diesel vehicles<\/li>\n<\/ul>\n<p>Manufacturers may also claim a baseline of 1.0\u202fg\u202fCO\u2082\/km (equivalent to 0.0422\u202fL\/100\u202fkm) for each eligible technology deployed in a vehicle, up to an overall cap of 9.0\u202fg\u202fCO\u2082\/km (0.3795\u202fL\/100\u202fkm). The Gazette lists twelve such technologies, ranging from start\u2011stop systems and tyre\u2011pressure monitoring to solar\u2011reflective paint and PWM\u2011controlled radiator fans.<\/p>\n<h2>Credit, Debit and Compliance Mechanisms<\/h2>\n<p>The difference between a manufacturer\u2019s actual average fuel consumption (P) and the applicable standard (T) is converted into either credits or debits. A credit equals (T\u202f\u2212\u202fP) multiplied by the total number of vehicles sold, while a debit equals (P\u202f\u2212\u202fT) multiplied by the total number of vehicles. These credits and debits are recorded in a manufacturer\u2011level passbook that can be carried forward within the current compliance block.<\/p>\n<p>Manufacturers are permitted to trade credits with one another on mutually agreed terms, provided the transactions are reported to the Designated Agency. Additionally, manufacturers facing a debit balance may purchase credits from the Bureau of Energy Efficiency (BEE) under Rule\u202f8 of the Energy Conservation (Compliance Enforcement) Rules,\u202f2025. The purchase price per gram of CO\u2082\/km escalates each year:<\/p>\n<ul>\n<li>2027\u201128: \u20b92,500<\/li>\n<li>2028\u201129: \u20b93,000<\/li>\n<li>2029\u201130: \u20b93,500<\/li>\n<li>2030\u201131: \u20b94,000<\/li>\n<li>2031\u201132: \u20b94,500<\/li>\n<\/ul>\n<p>All credit\u2011related activities\u2014trading, buy\u2011outs and final passbook submissions\u2014must occur within a 30\u2011day window from 1\u202fOctober to 31\u202fOctober each assessment year. The Designated Agency must forward the compiled data to the BEE by 30\u202fSeptember and submit the final passbook by 30\u202fNovember.<\/p>\n<p>Compliance is assessed annually, but any contravention is evaluated only at the end of a compliance block, after all credits have been settled. Non\u2011compliance is expressed in litres per 100\u202fkm, calculated as the total debit in g\u202fCO\u2082\/km divided by the product of total sales in the block and the factor 23.7135.<\/p>\n<p>From 1\u202fApril\u202f2027, manufacturers must declare CO\u2082 performance for each model under both the Ministry\u2019s own MIDC test procedure and the Worldwide Harmonized Light Vehicles Test Procedure (WLTP). State\u2011wise sales data must accompany the final compliance report each year. A separate conversion factor that aligns MIDC targets with WLTP will be notified by the Ministry of Power in consultation with the BEE.<\/p>\n<p>Small\u2011volume manufacturers\u2014defined as those producing or importing fewer than 1,000 eligible vehicles in a reporting period\u2014are exempt from meeting the specific fuel\u2011consumption target. However, they remain obligated to report their annual average actual fuel consumption to the BEE.<\/p>\n<p>The CAFE\u202fIII framework thus combines stricter fuel\u2011efficiency targets with a flexible credit system that heavily favours battery electric vehicles (BEVs) and range\u2011extended electric vehicles, which receive a three\u2011times weightage (derogation factor of 3.0). Plug\u2011in hybrids and strong hybrids using flex\u2011fuel ethanol enjoy a factor of 2.5, while strong hybrids without ethanol receive 1.6 and flex\u2011fuel ethanol vehicles get 1.1. This tiered approach is designed to accelerate the shift toward electrified mobility while still offering pathways for conventional and hybrid technologies to improve their fuel\u2011efficiency performance.<\/p>\n\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>The Ministry of Road Transport and Highways has issued CAFE\u202fIII norms for cars, defining fuel\u2011consumption targets through 2032 and granting triple credit weightage to battery electric vehicles.<\/p>\n","protected":false},"author":4,"featured_media":2326,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[299],"tags":[2532,770,2533,2531,1494],"class_list":["post-2325","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-cafe-iii","tag-electric-vehicles","tag-emissions-standards","tag-fuel-efficiency","tag-india-automotive","entry"],"_links":{"self":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts\/2325","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/comments?post=2325"}],"version-history":[{"count":0,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts\/2325\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/media\/2326"}],"wp:attachment":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/media?parent=2325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/categories?post=2325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/tags?post=2325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}