New Delhi, September 30, 2026 (Yes Punjab News)
The government has notified the Corporate Average Fuel Economy (CAFE-3) norms for automakers, removing a proposed separate concession for small petrol cars while retaining incentives for cleaner vehicles, including electric vehicles.
The new norms, notified by the Ministry of Power, will come into effect from April 2027 and remain in force until March 2032.
The Centre had proposed a concession of 3 grams of carbon dioxide (CO2) per kilometre for petrol cars weighing up to 909 kg in a draft released last year. However, the proposal faced opposition from several leading automakers and has not been included in the final rules.
Instead, the government has revised the formula used to calculate manufacturers’ fleet-wide CO2 emissions targets. The reference vehicle weight has been increased to 1,229 kg from 1,170 kg in the September 2025 draft, while the annual weight adjustment has been reduced.
These changes provide relatively greater relief to manufacturers with lighter vehicle fleets, while setting stricter emissions targets for heavier fleets.
Under the final formula, a car weighing 909 kg will have an emissions target of approximately 82.8 grams of CO2 per kilometre for FY28, compared with around 76 grams under the September 2025 draft.
For a vehicle weighing 2,500 kg, the target will be approximately 142.4 grams of CO2 per kilometre under the final rules, compared with around 151.4 grams under the earlier formula.
The final CAFE-3 norms also retain incentives for cleaner vehicles through a super-credit mechanism, under which certain vehicles receive additional weightage when calculating a manufacturer’s fleet performance.
Under the mechanism, one battery electric vehicle will be counted as three vehicles. The same 3x factor will apply to range-extended electric vehicles.
Plug-in hybrids and strong hybrids running on flex-fuel will receive a 2.5x factor, while strong hybrids will have a 1.6x factor. Flex-fuel vehicles will receive a 1.1x factor.
The rules also introduce a credit-debit system to track manufacturers’ performance against their emissions targets. Automakers that perform better than their prescribed targets will earn credits, while those that fail to meet them will accumulate debits.
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