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CAFE-III Norms: India’s Fuel Efficiency Targets and Super Credits

25 April 20261 min read
ENVIRONMENT & ECOLOGYCAFE-III Norms:India’s FuelEfficiency Targetsand Super Credits25 April 2026safalsetu.com

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

PhasePeriodTarget
Phase 12017-2022130 gCO2/km
Phase 22022-2027113 gCO2/km
Phase 3 (CAFE-III)2027-203278.9 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 typeCredit factor
Electric vehicles3.0
Strong hybrids1.6 (earlier drafts: 2.0)
Flex-fuel vehicles1.1

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.

Test yourself

1. Under the CAFE-III super credit scheme discussed in April 2026, which technology gets the highest multiplier?

EVs are counted as 3 units, above hybrids (1.6) and FFVs (1.1).

2. What CO2 target does CAFE-III set for FY32?

The final Phase 3 target is 78.9 gCO2/km by FY32.

3. CAFE norms regulate fuel consumption and CO2 emissions on what basis?

They target the fleet-wide average of a maker's whole lineup, not single models.