The Indian government is actively promoting the adoption of both flex-fuel vehicles (FFVs) and electric vehicles (EVs) to reduce reliance on crude oil imports and lower vehicular emissions. Union Minister for Road Transport and Highways Nitin Gadkari has emphasized that both technologies will be considered under the upcoming Corporate Average Fuel Efficiency (CAFÉ) 3 norms, set to be implemented from April 2027.
Understanding CAFÉ Norms
Corporate Average Fuel Efficiency (CAFÉ) norms are regulations designed to reduce fuel consumption and carbon dioxide (CO2) emissions from passenger vehicles. These norms set average fuel efficiency and CO2 emission targets for the entire fleet of vehicles sold by a manufacturer in a financial year, rather than for individual models. The goal is to encourage manufacturers to produce more fuel-efficient vehicles, including EVs and hybrid vehicles. The norms apply to petrol, diesel, liquefied petroleum gas (LPG), and compressed natural gas (CNG) passenger vehicles.
CAFÉ norms were introduced in India under the Energy Conservation Act, 2001, by the Bureau of Energy Efficiency (BEE). They were first notified in 2017 and implemented in two phases:
The upcoming CAFÉ III norms, effective from 2027, aim for a CO2 emission target of 91.7 g/km under the Worldwide Harmonised Light Vehicle Test Procedure (WLTP). Further tightening is expected under CAFÉ IV (2032-2037), with a target of 70 g/km.
Flex Fuel Vehicles and CAFÉ Norms
Flex-fuel engines can run on 100% biofuels and petrol. The Indian government is promoting FFVs as a way to reduce dependence on petroleum imports and lower carbon emissions.
The automotive industry has proposed a biogenic factor of 14.3 percent for petrol vehicles with up to 20 percent ethanol blending and a 22.2 percent biogenic factor for FFVs across all powertrain technologies, including Strong Hybrid Electric Vehicles (HEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) under CAFE III.
Electric Vehicles and CAFÉ Norms
The BEE has proposed incentives for carmakers to produce more battery EVs to avail higher fuel efficiency credits. Manufacturers can earn super credits by selling battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs). Credits are awarded as follows: 3 for BEVs, 2.5 for PHEVs, and 2 for HEVs. These credits count multiple times in the sales-weighted average, reducing the overall CO2 emissions figure.
Balancing Regulations
The government is working on balancing regulations under CAFÉ 3 to encourage customer adoption of both flex fuel and electric vehicles. The new regulations will consider the contributions of both flex fuel and battery technologies. By including both technologies, the government aims to create a more sustainable and diverse transportation sector, reducing reliance on any single technology.
Challenges and Recommendations
Some experts suggest making the emission norms substantially more stringent than currently proposed and reducing super-credits for Electric Vehicles (EVs) from 4 to 3 under CAFE IV (for 2032-2037). There is also a need for policies that push automakers to scale up EV production and achieve cost parity with internal combustion engine (ICE) vehicles.
