India's Ministry of Power has released draft CAFE-III fuel efficiency standards for passenger vehicles, set to replace CAFE-II from April 1, 2027. The proposed norms introduce Carbon Neutrality Factors (CNFs) that credit ethanol, biofuels, and Compressed Bio-Gas (CBG) for their carbon-neutral benefits, reducing declared tailpipe CO2 emissions during compliance. Fuel consumption targets tighten progressively from 3.996 L/100 km (94.76 gCO2/km) in 2027-28 to 3.3273 L/100 km (78.90 gCO2/km) by 2031-32. The draft includes super credits for battery electric, hybrid, and flex-fuel vehicles, plus a credit-trading mechanism for manufacturers. Companies selling fewer than 1,000 passenger vehicles annually remain exempt. Public feedback is open until August 6, 2026. The move signals India's push to align vehicle efficiency with its broader decarbonization goals, though the effectiveness of CNFs and credit trading will depend on actual biofuel blending rates and enforcement.
