More Stories

Informist, Thursday, Jul. 16, 2026

 

MUMBAI – The Ministry of Power on Thursday circulated the draft for Corporate Average Fuel Economy 2027 Norms, or CAFE-III norms, for stakeholder consultations. These norms would apply to the M1 category of passenger vehicles manufactured or imported for sale in India between 2027-28 and 2031-32, the ministry said in a release.

 

The M1 category includes vehicles that have up to eight seats besides the driver's seat and weigh under 3,500 kilograms. "The proposed CAFE 2027 norms are expected to accelerate the adoption of advanced fuel-efficient technologies and cleaner propulsion systems, including battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs), leading to lower emissions from the passenger vehicle fleet," the ministry said in a draft notification. 

 

"The norms are also expected to improve the average fuel efficiency of passenger vehicles, resulting in lower fuel consumption, reduced dependence on imported crude oil, enhanced energy security, and a lower oil import bill, while supporting technological innovation and India's commitment to achieving net-zero emissions by 2070," the notification said. 

 

These norms measure the emissions made across an automaker's entire annual fleet, rather than at an individual level. "By integrating fleet-based standards, petrolequivalent fuel accounting, carbon neutrality recognition for renewable fuels, technology incentives, super credits for advanced vehicles provides a comprehensive and balanced approach for improving the energy efficiency of India's passenger car fleet," the ministry said.

 

The latest iteration of emission norms lays special emphasis on the contribution of renewable fuels to the lifecycle carbon reduction. Lawmakers have proposed carbon neutrality factors to recognise the contribution of renewable fuels by permitting specified reductions in declared tailpipe carbon dioxide emissions before compliance assessment. 

 

Carbon neutrality factors act as a mathematical discount on a vehicle's measured emissions to reward the use of sustainable fuels. Different fuels such as ethanol, compressed biogas, and biofuel have been allotted differentiated carbon neutrality factors. 

 

Battery electric vehicles, range-extended electric vehicles, plug-in hybrid vehicles, strong hybrid electric vehicles, and flex-fuel vehicles will get super credits as the government seeks to encourage adoption of these powertrains over conventional powertrains.

 

Advanced fuel-saving technologies also get special provisions. These technologies include start-stop systems, tyre pressure monitoring systems, regenerative braking systems, and six-speed or higher transmission systems.

 

If automakers perform better than their prescribed target, they can avail compliance credits that can be carried forward within specified compliance blocks. The ministry has sought feedback and suggestions from stakeholders by Aug. 6.  End

 

Reported by Anand JC

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.