New Draft CAFE Rules

Syllabus: GS3/Environment

Context

• India has proposed to significantly revamp its key vehicle emissions rules, called the Corporate average fuel efficiency (CAFE) norms.

India’s Current CAFE Norms

• The Bureau of Energy Efficiency introduced the CAFE norms in 2017 to regulate fuel consumption and carbon emissions from passenger vehicles. 
• These norms apply to vehicles running on petrol, diesel, liquefied petroleum gas (LPG), compressed natural gas (CNG), hybrids, and electric vehicles (EVs) weighing less than 3,500 kg. 
• The norms were tightened in the beginning of financial year 2022-23, with increased penalties for non-compliance.
• These norms are designed to reduce oil dependency and curb air pollution.

Key Proposed Provisions: 

• Objectives of CAFE 3 Norms: 
  • Reduce fuel consumption and CO₂ emissions.
  • Promote EVs, hybrids, and CNG vehicles.
  • Provide protection for small cars while aligning with global best practices.
• Applicability: Targets M1 category vehicles i.e. passenger cars with up to 9 seats (including driver) and max weight 3,500 kg.
  • All manufacturers must comply with fuel efficiency & CO₂ emission targets, else face penalties.
• Efficiency Target: Each car company has a fuel efficiency target based on the average weight of its cars.
  • Heavier cars have a slightly higher target, lighter cars have a stricter target.
• Small Cars: These norms offer additional exemptions to smaller cars up to 9 g CO₂/km lower.
  • Goal: Revive the small car segment and make it easier for manufacturers to comply with emission rules.
  • Small cars have limited scope to improve fuel efficiency, and their sales have fallen sharply in recent years.
• Electric Vehicles: CAFE 3 norms propose to offer companies “super credits” based on the type of vehicle they sell.
  • Each EV sold will be counted three times while calculating a company’s average.
• Relaxation on Fuel Type: The draft also carbon neutrality factor (CNF), which offers further relaxation on the targets based on the type of fuel used in a car.
• Emission Pooling: Up to 3 manufacturers can form a pool to meet targets jointly.
  • Pool is treated as one manufacturer; pool managers accountable for penalties.
  • Benefit: Strategic partnership reduces compliance cost and balances fleet emissions.

Conclusion

• CAFE 3 norms aim to reduce fuel use and CO₂ emissions, encourage lighter and more efficient cars, support small cars and EVs, and allow collaboration among manufacturers to meet targets more easily.

Source: IE