The proposed CAFE III framework sets tighter fleet-wide emission targets, while offering specific concessions for smaller petrol cars and stronger incentives for electric and hybrid vehicles. This has triggered debate within the industry.Toyota Kirloskar Motor has urged the government to issue the final notification for the next phase of India’s Corporate Average Fuel Efficiency (CAFE) norms at the earliest, saying timely clarity is critical for automakers to prepare for the tighter regulatory regime due to begin in 2027.
The government released draft rules for the new CAFE standards last year, which will govern passenger vehicle fuel consumption and carbon emissions from April 2027 to March 2032.
“With the CAFE norms supposed to be effective from 2027, it will be really good if the government can issue the final notification soon, because that will give clarity to work towards it,” Vikram Gulati, Country Head and Executive Vice-President, Toyota Kirloskar Motor, told PTI.
Need alignment with national programmes
Gulati said the CAFE framework is an important regulatory tool to drive lower carbon emissions from passenger vehicles, but added that it should be aligned with the government’s broader energy transition initiatives.
“We believe this regulation has to be in sync with other national programmes and must scientifically take into account energy substitution and low-carbon realities such as ethanol and compressed biogas,” he said.
He added that the targets should strike a balance between ambition and realism, allowing manufacturers sufficient flexibility while still pushing improvements in efficiency and emissions reduction.
Debate over relief to small cars
The proposed CAFE III framework sets tighter fleet-wide emission targets, while offering specific concessions for smaller petrol cars and stronger incentives for electric and hybrid vehicles. This has triggered debate within the industry.
Some automakers, including Tata Motors, have opposed any leniency for small cars based on weight and affordability. In contrast, others, such as Maruti Suzuki, have argued that the norms aim to push larger vehicles to significantly improve fuel efficiency.
Toyota Kirloskar Motor does not have a direct view on the issue, Gulati said, noting that the company does not operate in the small car segment.
India’s CAFE regulations, introduced in 2017, cap the average fuel consumption and carbon dioxide emissions of an automaker’s overall passenger vehicle fleet, encouraging manufacturers to improve efficiency and reduce emissions. The second phase, CAFE II, came into effect in 2022.
The next phase, CAFE III, is expected to start from April 2027. The Bureau of Energy Efficiency (BEE), under the Ministry of Power, released the draft regulations in September last year and is currently reviewing stakeholder feedback before finalising the norms.
