Overview
- The Ministry of Power notified the final CAFE‑III norms on Tuesday, Sept. 29, and the rules apply from April 1, 2027 through March 31, 2032 with progressively tighter fleet targets across that period.
- For a reference fleet weight of 1,229 kg the permitted fleet average falls from 3.996 litres/100 km in FY28 to 3.3273 litres/100 km in FY32, equivalent to about a 16.7% improvement and roughly 94.8 gCO2/km to 78.9 gCO2/km.
- The regulation builds multiple compliance routes: BEVs and range‑extended EVs get a 3.0x super‑credit, PHEVs and flex‑fuel strong hybrids 2.5x, strong hybrids 1.6x and flex‑fuel ethanol 1.1x, while 12 approved efficiency technologies can yield up to 9 gCO2/km of credits.
- A tradable credit system and a BEE buyout let manufacturers bank, trade or purchase compliance; BEE buyout prices rise from ₹2,500 per g CO2/km in FY28 to ₹4,500 in FY32 and credits may be carried only within each compliance block.
- The final flattened weight formula removes the separate small‑car carve‑out and shifts relative advantage to lighter‑fleet makers while analysts warn that stacked flexibilities, the pending MIDC‑to‑WLTP conversion factor and crediting rules could materially reduce on‑road fuel‑use and electrification gains compared with the headline target.