Why in the news
Automakers agreed on the third phase of fuel efficiency targets in mid-April 2026. Critics say the flexible design could let manufacturers dodge a sharper switch to electrification.
About CAFE
- Regulates the fleet-wide average of fuel use and CO2 emissions across a maker’s entire range.
- Goals: nudge firms to efficient technology, cut the crude oil import bill and match global emission standards.
Phase-wise targets
| Phase | Period | Target |
|---|
| Phase 1 | 2017-2022 | 130 gCO2/km |
| Phase 2 | 2022-2027 | 113 gCO2/km |
| Phase 3 (CAFE-III) | 2027-2032 | 78.9 gCO2/km by FY32 |
Features of the 2026 consensus
- Flatter compliance curve: the separate 3 g CO2/km allowance for sub-4 metre small cars was dropped; the formula slope was eased, helping lighter vehicles while keeping pressure on heavy SUVs.
- Technology neutrality: EVs, strong hybrids and flex-fuel vehicles (FFVs) are all supported.
- Super credits: cleaner vehicles count for more than one unit in the fleet average.
| Vehicle type | Credit factor |
|---|
| Electric vehicles | 3.0 |
| Strong hybrids | 1.6 (earlier drafts: 2.0) |
| Flex-fuel vehicles | 1.1 |
Related concept
- Testing is changing: the older MIDC (Modified Indian Driving Cycle) gives way to WLTP, the Worldwide Harmonized Light Vehicles Test Procedure.
- WLTP mirrors real-world driving better but tends to report higher emissions, making compliance harder.
Exam angle
- Full form: Corporate Average Fuel Efficiency.
- Highest super credit factor: EVs at 3.0.
- Test cycle shift: MIDC to WLTP.