The government will finalise the Corporate Average Fuel Efficiency (CAFE) norms within the next eight days, Road Transport and Highways Minister Nitin Gadkari said on Tuesday, signalling movement on regulations critical to the automobile industry’s fuel-efficiency and emission targets.
Gadkari said he has spoken to the Union power minister, and the concerned ministry is expected to forward the file to his ministry within the next three to four days.
“CAFE norms will be finalised in the next eight days. I have spoken to the power minister and they will be sending the file in the next 3–4 days,” Gadkari said.
Industry Structure Debate
The automobile industry remains divided over the proposed CAFE-3 norms, primarily due to the weight-based structure of the targets, which several automakers argue favours small cars while penalising manufacturers of larger and heavier vehicles. Under the framework, small cars are eligible for an additional carbon emission benefit of up to 3.0 grams of carbon dioxide per kilometre.
Small car makers counter that compliance is inherently more difficult for them, as small cars are already among the lightest and most fuel-efficient vehicles on the road, leaving limited scope for further emission reduction through weight reduction or incremental technology changes.
The CAFE norms are a key regulatory instrument aimed at pushing automakers towards cleaner and more fuel-efficient vehicles by setting fleet-level carbon emission limits, while also encouraging the adoption of electric and alternative-fuel technologies.
Tightening Emission Targets
Under the proposed CAFE-3 regime, scheduled to be implemented over a five-year period from FY28 to FY32, permissible fuel consumption levels are expected to tighten to a range of 3.7264 to 3.0139 litres per 100 km. Correspondingly, average fleet emissions are estimated to fall to below 91.7 grams of CO₂ per km.
Finalisation of the norms is expected to bring long-awaited regulatory clarity to the automobile industry, which has been seeking certainty to plan future investments, product strategies and compliance pathways.