New fuel norms may be linked to size of your car

Economic Times

4 hours ago

The Indian government is considering a differentiated CAFE (Corporate Average Fuel Efficiency) structure based on vehicle size for its third edition, set to roll out on April 1, 2027. The heavy industries ministry has asked stakeholders to submit their views on enacting differentiated CAFE norms based on vehicle size.
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The government may consider a differentiated structure based on vehicle size while framing the third edition of CAFE (Corporate Average Fuel Efficiency) norms, aimed at enhancing fuel economy of all vehicles and curbing carbon emissions. The new rules are expected to be rolled out from April 1, 2027.People in the know told ET that in the latest round of meetings between government officials and industry representatives on June 17, the heavy industries ministry asked stakeholders to submit their views on enacting differentiated CAFE norms based on vehicle size."Unlike the previous versions of CAFE norms, this time, stakeholders have been asked to submit their views on whether a framework can be arrived at which will determine efficiency and emission norms based on the size of the vehicle," said a senior industry executive who did not wish to be named.There is currently no clarity on whether the typically fuel-efficient small cars will also be defined as per engine capacity, vehicle length, or if they will be automatically eligible for special incentives under the proposed norms. A consultative meeting between government officials and industry representatives is slated for later this week.Senior officials said a decision has yet to be taken on whether to define separate emissions for small cars. Discussions are underway and a final decision will be taken by the power ministry's Bureau of Energy Efficiency (BEE), the officials said."Cars at varying price points can be treated differently since buyers of bigger cars can pay a premium for stricter emission norms," said one of the officials aware of the deliberations.BEE has given automakers an emission target of 91.7g/km under the more-stringent WLTP cycle (Worldwide Harmonised Light Vehicles Test Procedure). However, automakers have proposed emissions of 92.9 g/km under the India-specific, MIDC (Moderated Indian Driving Cycle). These rules are mandated for testing vehicle emissions and fuel efficiency. Current fuel emission standards under CAFE II norms, which will run through March 2027, allow automakers to emit 113.1 grams per km."We have to see whether this proposal (to outline fuel efficiency norms basis vehicle size) is thrashed out further. But overall, the industry has been saying that since the pace of adoption of electric vehicles has been slower than expected, norms originally proposed under CAFE 3 should be eased," said a second person in the know.CAFE norms are imposed on a carmaker's entire fleet, and not individual models. They are based on time limits set on the company's total carbon dioxide emissions and are aimed at pushing companies to make more fuel-efficient cars by using clean technologies.A car's CO2 emissions are directly proportional to the amount of fuel it consumes. This means that an individual model can achieve the carbon emission limit if the manufacturer has fuel-efficient small cars in its portfolio.SUVs, considered less fuel-efficient than small cars, currently dominate India's passenger vehicle sales. In fiscal 2025, SUVs had about 55% share of total passenger vehicle sales.