Government to consult stakeholders on upcoming fuel efficiency rules
Government to consult stakeholders on upcoming fuel efficiency rules
The Indian government has announced plans to engage with stakeholders before implementing the Corporate Average Fuel Efficiency-III (CAFE-3) regulations, which aim to limit the average fuel consumption and carbon emissions of automobile manufacturers’ entire fleets. Union Power Minister Manohar Lal highlighted the importance of a "consensual view" in introducing the rules, which are expected to take effect from 1 April 2027 and remain in force until 31 March 2032.
The CAFE-3 norms, proposed by the Bureau of Energy Efficiency (BEE), have drawn mixed reactions from automakers. Some manufacturers are advocating for relaxed emission standards for small cars, citing weight and affordability concerns, while others argue that such concessions could compromise safety standards and hinder India’s transition to clean energy.
Divergent Views Among Automakers
The draft rules, discussed since September 2025, suggest relaxed conditions for small cars with an unladen mass of up to 909 kg, an engine capacity not exceeding 1200 cc, and a length under 4000 mm. Market leader Maruti Suzuki India has supported these concessions, with Chairman R C Bhargava stating that the primary aim of CAFE norms is to enhance fuel efficiency and reduce emissions in larger vehicles.
On the other hand, Tata Motors Passenger Vehicles Ltd has expressed opposition to these relaxations. Managing Director and CEO Shailesh Chandra argued in November that leniency for small cars would undermine safety features and distract from the goal of sustainable mobility.
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Government Emphasises Collaboration
Speaking at the 25th Foundation Day of the BEE, Union Power Minister Manohar Lal addressed the contrasting perspectives among stakeholders. "They have different priorities. There are clash of views also. They push for their views. We have to take a decision at some point. We try to bring a consensus on the decision. Things don't happen unanimously because everybody has a vested interest. We will take a consensus view and soon implement it", he said.
Union Heavy Industries Minister H D Kumaraswamy also commented on the government’s collaborative approach, noting, "We already had a meeting with stakeholders and the power ministry. The power ministry, according to my information, now, after the meeting with stakeholders, has sent the proposal to PMO."
India’s Progress on Climate Goals
During the BEE Foundation Day event, the power minister highlighted India’s achievements in reducing emissions and increasing non-fossil fuel capacity. "India has reduced the emissions intensity by 36 per cent of its GDP from 2005 levels and achieved 52 per cent of non-fossil fuel installed capacity ahead of the 2030 target", he said.
He also underscored the importance of energy efficiency in achieving the vision of Viksit Bharat @2047 and emphasised the need for sustainable energy management in emerging sectors like data centres and Artificial Intelligence.
New Initiatives Unveiled by BEE
To mark its 25th year, the BEE released its new logo, and several initiatives were launched to enhance energy efficiency. A new portal, http://www.rco.beeindia.gov.in, was introduced to streamline monitoring and compliance processes. Additionally, the BEE Star Label Mobile Application, developed in collaboration with CLASP, was launched to help consumers access product information by scanning QR codes on star-labelled appliances.
As the government prepares to finalise the implementation of CAFE-3 norms, the focus remains on balancing diverse stakeholder interests while advancing energy efficiency and sustainability goals in the automotive sector.