Saturday, February 28, 2026

CAFE 3 Norms Draft Eases Emission Targets for Smaller Vehicles

The Bureau of Energy Efficiency (BEE) has released a revised draft of the upcoming Corporate Average Fuel Economy (CAFE) 3 norms, which will make the average CO2 emissions stringent from April 2027. The revised draft proposes multiple changes, including the long-standing demand to offer emission relaxation to small, lightweight cars.

CAFE 3 Relaxation for Small Cars

The revised draft proposes the average CO2 emission limit to be 88.4 g CO2/km in the first year, against the earlier proposed average CO2 emission limit at WLTP of 91.7g CO2/km. For those unaware, the current limit is 113g CO2/km in CAFE 2 norms.

This will be followed by a series of progressively tighter targets in the following years, up to 71.5g. However, the new draft proposes relaxation for smaller petrol cars (under 4 meters and up to 909kg, with engine capacity under 1200cc), offering an additional reduction of 3g CO2/km in their manufacturer-declared CO2 performance. However, there is a maximum limit (cap) on this special relief — no single car model or any of its variants can claim more than 9g/km reduction in CO2 emissions in total for any given reporting year.

Small volume manufacturers, selling less than 1,000 cars yearly, are exempt from meeting specific emission targets under CAFE 2027. Furthermore, companies can form a “pool” (up to 3 companies) and meet the rules together. The manufacturer nominated as the ‘pool manager’ will be the contact point for the pool and will be responsible for paying any penalty imposed on the pool in accordance with the Energy Conservation Act, 2001 (52 of 2001).

EV road tax

CAFE 3 Norms: Credit System Explained

The draft proposes a credit system designed to help manufacturers offset the impact of higher-emission models. It does so by assigning extra “weight” or credit to cleaner vehicles—such as electric vehicles, range-extender hybrids, flex-fuel ethanol vehicles, and strong hybrids. These credits act as multipliers when calculating a manufacturer’s corporate average CO₂ performance, effectively balancing out emissions across the fleet.

Vehicle TypeCredit Score
Plug-in Hybrid Electric Vehicle / Strong Hybrid Electric Vehicle (Flex Fuel Ethanol)3
Plug in Hybrid Electric Vehicle / Strong Hybrid Electric Vehicle (Flex Fuel Ethanol)2.5
Strong Hybrid Electric Vehicle2
Flex Fuel Ethanol Vehicles1.5

In short, the upcoming CAFE 3 norms are about pushing all car companies to make and sell more fuel-efficient, less-polluting cars—especially encouraging electric and green-fuel models—without making small, affordable cars disappear. Those who do well get credits; those who don’t comply pay fines.

Car News

Toyota Land Cruiser, Lexus LX Recalled In India Over Gearbox Software Fault

0
Toyota and Lexus India have issued a recall for the Land Cruiser and Lexus LX due to a potential software issue with the gearbox...
2026 new-gen Renault Duster launch date

2026 Renault Duster India Launch Confirmed For March 17

0
After being revealed on January 26, Renault India has finally confirmed that the new-gen Duster will launch on March 17, 2026, in India, marking...
Maruti eVitara all genuine accessories

Add More Bling To Your Maruti eVitara With These Official Accessories

0
Maruti Suzuki has recently launched the eVitara SUV, marking its first all-electric offering in the country. Based on the Heartect-e skateboard platform with eAxle...

Skoda Kushaq Facelift Deliveries To Begin In March; Production Starts

0
Skoda India has begun series production of the Kushaq facelift at its Chakan plant in Pune. Its bookings are already underway for a token...

Related Articles

Add More Bling To Your Maruti eVitara With These Official Accessories

Maruti Suzuki has recently launched the eVitara SUV, marking its first all-electric offering in the country. Based on the Heartect-e skateboard platform with eAxle...

Tata Punch EV vs Nexon EV: Which EV Makes More Sense?

The facelifted Tata Punch EV is the newest electric offering in the country, which is priced between Rs 9.69 lakh and Rs 12.59 lakh...

Kia Syros EV Spied Testing; Launch Expected Soon

The all-electric version of the Kia Syros has been spotted testing on Indian roads, suggesting its launch is just a few months away. It...

Government Mandates Minimum 95 RON E20 Fuel From April 1

In a notification dated February 17, 2026, the Ministry of Petroleum and Natural Gas mandated the sales of up to 20% ethanol blended fuel...

Mahindra’s Next Born-Electric SUV Scheduled For 2027 Launch

The BE07 will be the brand's fourth born-electric vehicle after the BE 6, XEV 9e and XEV 9s. It is likely to be underpinned by...