The upcoming corporate average fuel efficiency (CAFE-III) norms are likely to tighten emission targets for small cars without the regulatory relief that several major automobile markets provide for entry-level vehicles.
In a presentation to the Prime Minister’s Office on Monday, the Bureau of Energy Efficiency (BEE) acknowledged global precedents where regulators soften emission tightening for very small cars. However, this approach has not been incorporated into the proposed CAFE-III roadmap that was presented to the PMO at the meeting on Monday.
Fuel-efficiency regulations typically set a target for carbon dioxide emissions measured in grams per kilometre (g CO₂/km). Carmakers must ensure that the sales-weighted average emissions of the vehicles they sell remain below this limit.
Many countries determine these targets using a weight-based formula in which heavier vehicles are allowed slightly higher emissions while lighter vehicles face tighter limits. But regulators in several markets stop tightening the target beyond a certain point for very small cars. This is known as flattening the emission curve.
Examples of flattening mechanisms
The BEE presentation cited examples where such flattening mechanisms are already in place. In China, emission tightening stops for cars below 1,090 kg, while South Korea uses a similar threshold of 1,110 kg. The United States uses a vehicle footprint standard of about 41 square feet to achieve a comparable outcome.
Under this approach, cars lighter than the threshold are treated as if they weigh that benchmark when calculating emission targets. This effectively provides regulatory headroom for very small vehicles.
For instance, an entry-level car weighing around 735 kg, such as the Renault Kwid, Maruti Alto or Hyundai i10, would be treated as weighing about 1,090 kg under China’s system. That would translate into an emission target of roughly 73 g CO₂/km rather than about 62 g CO₂/km under the proposed Indian framework.
What do Industry estimates suggest?
Industry estimates suggest such flattening mechanisms provide double-digit relief for small cars. The cushion is about 13 g CO₂/km in the US and South Korea, around 15 g CO₂/km in China and close to 18 g CO₂/km in the European Union.
India’s proposed framework currently offers no comparable relaxation.
An earlier proposal circulated in September that suggested a limited 3 g CO₂/km relaxation for small cars has also been dropped.
Manufacturers of entry-level vehicles say that such relief is necessary because small cars are already among the most fuel-efficient vehicles in the market and offer limited scope for further emission reductions without significant cost increases.
Without some form of regulatory cushion, manufacturers of small cars say that meeting the proposed emission targets could require expensive technologies such as hybrid systems, potentially pushing up the price of the most affordable cars and narrowing the entry-level segment.