India Publishes Draft of Corporate Average Fuel Efficiency Norms “CAFE III & IV”, effective from 2027

The Bureau of Energy Efficiency (BEE) has published the proposed Corporate Average Fuel Efficiency norms “CAFE III” and “CAFE IV” and has invited comments. CAFE is calculated based on the average fuel efficiency of all vehicles sold in a year regardless of vehicle type, and automakers are required to achieve the specified fuel efficiency standards for the vehicles to be produced. According to the proposal, CAFE-III will be implemented from FY2027 to FY2032, and CAFE-IV from FY2032 to FY2037. The fuel efficiency must be within the standards in the last year of each cycle.