MoRTH may bat for biofuel vehicles in CAFE 3 norms input to BEE
Corporate Average Fuel Efficiency or CAFE-3 norms are a cap on the average carbon dioxide emissions of a carmaker's entire fleet, and are currently set at 113 grams per kilometre.
MoRTH is likely to push for 'biogenic derogation' to be included in the third iteration of the norms, to be enforced from April 2027 at a lower cap of 91.7 g/km. Biogenic derogation refers to concessions given to emissions from flex fuels, ethanol, methanol, and other alternative biofuels.
'We are examining attaching differential weights to vehicles based on different fuel combinations including electric, bio fuels and also on domestic content under the Cafe 3 norms proposed' said the first person quoted above.
Under current CAFE 2 norms, carmakers get benefits for selling cleaner technologies such as hybrid vehicles, electric vehicles, and hydrogen fuel cell vehicles, but vehicles running on biofuels have not been incentivized yet.
MoRTH's push for biofuels is likely to provide manufacturers another option to reduce carbon emissions on Indian roads, with the penetration of electric and hybrid vehicles remaining low in most parts of the country.
'The plan will help address the concerns of the auto industry that keeping emission down with just one alternative fuel option by way of electric vehicles would be difficult as penetration of these vehicles still remains low. Now companies could push for attaining Cafe 3 norms by widening the fuel option for the vehicles,' said the person mentioned above.
'The weight system is still under discussion and once it is finalized, the same would be recommended to the panel that is finalizing Cafe 3 norms,' said the second person mentioned above.
Email queries sent to MoRTH and BEE remained unanswered till press time.
India's electric vehicle penetration for four-wheelers has risen up to 2.6% at the end of FY25, with a little over 100,00 electric cars sold out of more than 3.8 million cars.
Biofuels are fuels produced from organic matter, or biomass, such as plants and agricultural or industrial waste. They can be used as a replacement for or in addition to fossil fuels like diesel and gasoline, and can also be used to generate heat and electricity. Biofuels are considered a renewable energy source because the biomass used to produce them can be replenished. They also help in containing CO2 emissions when used as fuel in vehicles.
CAFE norms follow a 'super credit' system, wherein concessions are given for using cleaner forms of technology on the road. For instance, under current norms, the sale of an electric car is counted as three sales, while that of a fossil fuel car is counted as a single sale. This form factor multiple helps carmakers keep total fleet emissions low, as the average fuel efficiency is the total fleet emissions per sale.
A publicly available BEE invite for stakeholder consultations in June 2024 noted that the sale of one strong hybrid car would be counted as two, that of a plug-in hybrid car would be 2.5, and electric and hydrogen fuel cell cars would be counted as three.
BEE proposed in those consultations to increase these incentives for electric and hydrogen cars, but reduce it for hybrids.
Auto industry body Society of Indian Automobile Manufacturers (Siam) proposed in December 2024 the inclusion of a 'biogenic factor' in CAFE 3 norms.
'SIAM has proposed that CO2 produced from the combustion of biofuels should be classified as "green CO2" and therefore treated as zero, being biogenic CO2. This means that if a car runs on some blend of biofuel and petrol, the CO2 emissions from the biofuel component should be subtracted from the total tailpipe CO2 emissions for the purpose of CAFÉ calculation,' the letter dated 23 December 2024 said.
Siam proposed to subtract 14.3% of a vehicle's tailpipe emissions if it was running on E20 flex fuel. E20 is a blend of ethanol (20%) and gasoline (80%).
Indian carmakers are gearing up for the flex fuel shift.
'Hyundai Motor India Ltd. (HMIL) has actively participated in the auto industry's discussions on CAFÉ 3 norms, with its views submitted to the Government via SIAM in December 2024. We remain steadfast in our pursuit of smart, sustainable, and future-ready mobility solutions for India. We would not be able to comment further on the discussions on CAFÉ 3 till we receive any official communication from the Government,' said Puneet Anand, AVP and Vertical Head (Corporate Affairs, Corporate Communication & Social), HMIL.
Anand added, 'Currently, HMIL offers E20-compliant vehicles in line with prevailing Government regulations. In India, HMIL continues to deliver mobility options tailored to diverse consumer needs, spanning Petrol, Diesel, CNG, and Electric vehicles. Looking ahead, Hyundai Motor Company globally leads in propulsion technologies, encompassing ICE, CNG, Flex-Fuel, Hybrid, Electric and Hydrogen solutions.'
'HMIL remains committed to supporting the Government of India's vision for energy security, reduction in oil imports, and rural economic upliftment through the promotion of flex fuel technologies. In alignment with this, at the Bharat Mobility Global Expo 2025, HMIL unveiled the first working prototype of the flex fuel-powered Hyundai CRETA, equipped with advanced powertrain technology capable of operating on fuel blends ranging from E0 to E100. This innovation underscores our dedication to sustainable mobility, as flex fuel vehicles powered by ethanol — a biogenic fuel — offer reduced net carbon emissions, enhanced performance, and potential economic benefits for consumers, especially with supportive Government policies on fuel availability and incentives.'
Flex fuel vehicles are equipped with internal combustion engines that can operate on more than one fuel. They are primarily meant to run on ethanol and methanol or a blend of biofuels and on conventional fuels such as petrol or diesel. These engines can also run on various levels of ethanol blended in conventional fuels - typically from typically from E20 (20% ethanol) up to E100—without needing significant modifications in performance.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
6 minutes ago
- Business Standard
India likely to forego ₹4,060 crore in first year of UK trade pact: GTRI
India is expected to forego customs revenue of ₹4,060 crore in the first year of the free trade agreement with the UK, as tariffs are reduced or eliminated on a wide range of goods, think tank Global Trade Research Initiative (GTRI) said on Monday. The calculation is based on the current import figures from the UK. By the tenth year, it said, as tariff elimination phases-in more broadly, the annual loss is projected to rise to Rs 6,345 crore or around British Pound 574 million, based on FY2025 trade volumes. The India-UK free trade agreement, which was signed on July 24, will lead to a loss of customs revenue for both the countries, as tariffs are reduced or eliminated on a wide range of goods, GTRI added. India imported USD 8.6 billion worth of goods from the UK in 2024-25. Industrial products make up the bulk of these imports and face a weighted average tariff of 9.2 per cent. Most agricultural products, subject to much higher average tariffs of 64.3 per cent, were excluded from tariff cuts, except for items like whisky and gin. It said that India has committed to eliminating tariffs on 64 per cent of the value of imports from the UK immediately as the implantation starts. Overall, India will eliminate tariffs on 85 per cent of tariff lines and reduce tariff on 5 per cent of tariff lines or product categories. "Based on these factors, India's revenue foregone in the first year of the agreement is estimated at Rs 4,060 crore," GTRI Founder Ajay Srivastava said. He added that the UK imported USD 14.5 billion worth of goods from India in the last fiscal year, with a weighted average import tariff of 3.3 per cent. Under the comprehensive economic and trade agreement (CETA), the UK has agreed to eliminate tariffs on 99 per cent of Indian imports. "This translates to an estimated annual revenue loss of British Pound 375 million (or USD 474 million or Rs 3,884 crore) for the UK, again based on FY2025 trade data. As Indian exports to the UK expand, the fiscal impact is likely to grow over time," it said. The implementation of the pact may take about a year as it requires approval from the UK parliament.
Time of India
6 minutes ago
- Time of India
How China's BYD is operating by remote control to overcome obstacles in India
How China's BYD is operating by remote control to overcome obstacles in India Alisha Sachdev Bloomberg Jul 28, 2025, 14:04 IST IST Visa hurdles for top BYD management, investment roadblocks from the India government notwithstanding, the Chinese carmaker has proved popular with Indian drivers — sales in the first half of this year are nearly touching the total units sold in 2024 China's BYD is forging ahead with its attempts to expand in India despite roadblocks from the government that are preventing the electric vehicle maker from conducting key business dealings there. Like most Chinese companies, BYD has been unable to obtain visas for executives after a deadly clash between Indian and Chinese soldiers in 2020 sparked a major deterioration in political ties. That's seen the EV giant resort to holding board meetings and high-level business interactions in Colombo in Sri Lanka and Kathmandu in Nepal, and even as far away as Singapore, according to people familiar with the matter.
India.com
6 minutes ago
- India.com
Removing FDI Cap To Attract Sustained Foreign Investment In Insurance Sector: FM Sitharaman
New Delhi: With the increase in foreign direct investment (FDI) limit from 74 per cent to 100 per cent for insurance companies, the government aims to unlock the full potential of the Indian insurance sector, which is projected to grow at 7.1 per cent annually over the next five years, outpacing global and emerging market growth, Finance Minister Nirmala Sitharaman said on Monday. According to the minister, this is an enabling provision which will help the interested insurers to explore hiking the FDI percentage. "Further, this will eliminate the need for foreign investors to find Indian partners for the remaining 26 per cent, easing the process of setting up their operations in India, effectively increasing the number of insurers in the country," she said in a written reply to a question in the Lok Sabha. Removing the FDI cap will attract stable and sustained foreign investment, increase competition, facilitate technology transfer, and improve insurance penetration in the country, FM Sitharaman noted. Section 2(7A) (b) of the Insurance Act, 1938, prescribes the upper limit of FDI in an insurance company. The decision to increase the FDI component in a particular insurance company is made by its promoters, depending upon various factors such as the capital requirement of the company, solvency requirement, future business plans, etc, according to the government. The equity share capital of life insurers was Rs 24,110 crore, with the FDI part at Rs 11,529 crore (as on December 12, 2024), as per the IRDAI's data. FM Sitharaman also said that India offers a compelling growth opportunity for foreign banks, and the government is actively encouraging foreign investment in the banking sector. In April, addressing the India-UK Investor Roundtable discussion in London with around 60 investors, representing various pension funds, insurance companies, banks and other financial institutions in London, the Finance Minister outlined priorities of the government for enabling sustained economic growth and investment opportunities with the policy support that is shaping New India. She said that with an expanding middle class and a strong and stable policy environment, India is set to become the sixth largest insurance market by 2032, with the expected growth at 7.1 per cent CAGR from 2024-2028 - one of the fastest growing insurance markets among G20 countries.
