Thursday, September 17, 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

2026 Maruti Baleno Delta Explained: Value-for-Money Variant?

0
The 2026 Maruti Baleno facelift is available in five variants, but picking the right trim can be confusing for many buyers, especially when moving...

Flying Flea C6 Gets A New Parachute White Colour Option

0
Royal Enfield has introduced a new colour option for the Flying Flea C6 electric motorcycle called "Parachute White". It features white-coloured body panels, while...
Cars24 vs OLX vs Mahindra First Choice vs Maruti Suzuki True Value: which is better to buy a used car.

Cars24 vs OLX vs Mahindra First Choice vs Maruti Suzuki True Value: Comparing Used-Car Buying Options Under Rs 5 Lakh 

0
In such a highly competitive marketplace, finding a credible used car under Rs 5 lakh can feel a bit challenging. This is because nowadays...
Kia Carens Clavis CNG bookings

Kia Carens CNG and Carens Clavis CNG Bookings Now Open

0
Kia India has opened pre-launch bookings for the upcoming CNG iterations of the Carens and Carens Clavis MPVs. They will be Kia's first offerings...

Related Articles

Flying Flea C6 Gets A New Parachute White Colour Option

Royal Enfield has introduced a new colour option for the Flying Flea C6 electric motorcycle called "Parachute White". It features white-coloured body panels, while...

Cars24 vs OLX vs Mahindra First Choice vs Maruti Suzuki True Value: Comparing Used-Car Buying Options Under Rs 5 Lakh 

In such a highly competitive marketplace, finding a credible used car under Rs 5 lakh can feel a bit challenging. This is because nowadays...

Hyundai Bayon Design Sketches Revealed; Launch Soon

Hyundai India has released the first set of design sketches of the Bayon, revealing the front and interior design of the upcoming SUV. It...

2026 Maruti Baleno Alpha (O) Variant Explained: Is It Worth Spending More Than Zeta?

The 2026 Maruti Suzuki Baleno Alpha (O) is the top-spec variant of the premium hatchback and comes loaded up to the brim. However, it...

2026 Maruti Baleno Alpha Variant Explained: Is It Worth The Premium?

The facelifted Maruti Suzuki Baleno is available in five variants: Sigma, Delta, Zeta, Alpha and Alpha (O). While we have already detailed the initial...