Centre Notifies Phase III CAFE Norms, Tightening Passenger Vehicle Fuel-Efficiency Targets

Gist The Union government has notified the third phase of the Corporate Average Fuel Efficiency CAFE norms, tightening fuel-efficiency benchmarks for passenger vehicles for the 2027-2032 period. The new rules mandate a 16.7% improvement in fleet fuel consumption and offer aggressive multipliers for electric vehicles to push automakers toward cleaner technologies. This development is crucial for aspirants tracking India's emission reduction targets, EV transition policies, and climate change mitigation strategies within the transportation sector. Background The Corporate Average Fuel Efficiency CAFE norms mandate a maximum limit for the total carbon dioxide emitted by an automaker's entire fleet of vehicles, aiming to lower overall fuel consumption. Unlike Bharat Stage BS-VI emission standards that cap pollutants like NOx and particulate matter from individual tailpipes, CAFE norms focus on the average fuel efficiency of a manufacturer's total sales volume. The norms were first implemented in India in 2017 Phase I and tightened in 2022 Phase II , administered by the Ministry of Road Transport and Highways in coordination with the Bureau of Energy Efficiency BEE . Previously, automakers received concessions for manufacturing lightweight…