Corporate Average Fuel Efficiency (CAFE) Norms
What They Are
CAFE norms are fleet-level fuel efficiency standards that require automotive manufacturers to ensure the average fuel consumption across all vehicles they sell in a year does not exceed a specified limit. Unlike vehicle-level emission standards (like BS norms), CAFE operates at the manufacturer's portfolio level — a company can sell some gas-guzzlers as long as it offsets them with efficient models or EVs.
- Regulatory basis: Energy Conservation Act, 2001 (amended 2022 to enable carbon markets); administered by Bureau of Energy Efficiency (BEE) under Ministry of Power
- CAFE I: Effective 2017; fleet average CO₂ target of 130 g/km
- CAFE II: Effective April 2022; fleet average CO₂ target of 113 g/km; fuel consumption ~4.76 litres/100 km
- CAFE III: Effective April 2027; fleet average CO₂ target 88.4 g/km; fuel consumption 3.01 litres/100 km by 2032 — with a glide path from 3.73 L/100km in 2027
- Super Credits: EVs and plug-in hybrids (PHEVs) are counted with a multiplier (e.g., one EV counts as 2 or more vehicles for CAFE compliance), incentivising electrification
- Penalty: Non-compliant manufacturers face monetary penalties per unit of excess consumption
● Tracked since April 16, 2026 · last seen August 06, 2026 · updates as the daily brief publishes
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