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CAFE-3 Norms

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October 03, 2026

Prelims: Current events of national and international importance | Government Policies & Interventions

Why in News?

Recently, the Centre has notified new CAFE norms, tightening fuel‑efficiency targets for passenger vehicles.

Corporate Average Fuel Economy (CAFÉ)

  • This standard regulates the average fuel consumption across a car manufacturer's entire fleet, rather than evaluating each vehicle individually.
  • Objective – To improve fuel efficiency and reducing CO₂ emissions from passenger vehicles.

CAFE norms 3 factors upsc 2026

CAFE Credit System

  • CAFE credits function as compliance points within the regulatory framework.
  • Manufacturers are permitted to:
    • Earn credits by performing better than the prescribed target.
    • Carry forward credits or debits within the designated compliance block.
    • Engage in credit trading – Purchase credits from the Bureau of Energy Efficiency (BEE) to offset any deficits.
  • Key Provisions
    • Unused credits expire at the conclusion of the compliance block.
    • The credit trading and buyout window is open from 1 to 31 October of each assessment year.
    • Credit Buyout Price
      • ₹2,500/g CO₂/km in 2027–28.
      • ₹4,500/g CO₂/km in 2031–32.

Measurement of Fuel Consumption

  • Modified Indian Driving Cycle (MIDC) – It is utilized to calculate fleet average fuel consumption.
    • Fuel consumption is expressed in petrol-equivalent litres per 100 kilometers.
    • Various fuels are converted to petrol-equivalent values using standardized conversion factors.
  • Electric Vehicles (EVs) – EV Energy consumption for electric vehicles is measured in kilowatt-hours per 100 kilometers (kWh/100 km).
  • Efficiency Technologies – Manufacturers are permitted to claim a reduction of 1 g CO₂/km for each eligible efficiency technology.
  • Examples of eligible technologies include:
    • Start-stop systems
    • Tyre-pressure monitoring systems
    • Regenerative braking systems
    • High-efficiency alternators
    • LED lighting systems
    • Electric water pumps
  • The total maximum allowable benefit is 9 g CO₂/km.
  • Compliance Verification
    • 1st compliance phase – Manufacturers may self-declare claims during this phase.
    • 2nd compliance phase – Claims must be substantiated by validated test results during this phase.

Reference

The Hindu | CAFE-3 Norms

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