Incremental Change: On CAFE-III Norms

📌 Summary:

• India has notified Corporate Average Fuel Efficiency (CAFE) Phase-III norms, to be implemented from April 2027
• CAFE-III targets: passenger vehicles must achieve a fleet-average of 4.67 litres/100 km (vs current ~5.6 litres/100 km under CAFE-II)
• The norms apply to all passenger vehicle manufacturers selling in India; non-compliance attracts financial penalties
• The editorial argues CAFE-III is welcome but insufficient — the targets are less ambitious than EU (where petrol/diesel cars will be banned by 2035)
• India's auto sector contributes ~50% of India's oil import bill; better fuel efficiency is essential for energy security
• Electric vehicle (EV) credits: manufacturers can offset CAFE obligations by selling EVs — incentivises transition
• Challenges: India's vehicle fleet still predominantly ICE (Internal Combustion Engine); EV charging infrastructure lags
• Editorial recommendation: India needs a clear roadmap for phasing out ICE vehicles, not just marginal efficiency improvements
• CAFE norms link to India's NDC (Nationally Determined Contribution) commitments under Paris Agreement