CAFE-III to kick in from April 2027; Govt unlikely to extend implementation date: Official

New Delhi: Automobile manufacturers will have to comply with stricter fuel efficiency norms from April 1 next year, as the government is unlikely to extend the deadline for the implementation of the Corporate Average Fuel Efficiency III standards, Additional Secretary in the Ministry of Heavy Industries Hanif Qureshi said on Monday.

He said that the need to extend the implementation deadline beyond April 1, 2027, may not arise, as the government has been in touch with the auto industry stakeholders on the CAFE III norms, and has sought their feedback regularly, keeping them well-informed. CAFE III norms proposed to be effective from April 1, 2027, to March 31, 2032.

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Differences persist among auto manufacturers on the rules, with small car makers arguing that leniency must be granted to them in the corporate average fuel efficiency (CAFE-III) norms on the basis of weight and affordability, even as large OEMs are opposed to differential treatment, saying it would compromise safety features.

While the likes of Maruti Suzuki and Toyota Kirloskar want small cars to be granted benefits, others like Tata Motors, Mahindra, Hyundai and Kia are against it.

The government has called a high-level meeting on April 16 to deliberate upon the draft CAFE III norms, sources said, where the Secretaries of line ministries, including Power, Heavy Industries and Road Transport & Highways, are expected to be present, to take a consensual view before implementing the corporate average fuel efficiency rules.

Also read: EVs likely to lose zero-emission tag under CAFE III



Among other rules, the draft CAFE-III norms propose a more flexible compliance framework, easing penalty norms and permitting automobile makers that exceed emission reduction targets to trade surplus carbon credits with manufacturers that accumulate lesser carbon credits, on the basis of a mutual agreement, sources said.

The draft norms also propose that original equipment manufacturers (OEMs) can offset any debit balance accumulated in their passbook through the purchase of credits from the Bureau of Energy Efficiency (BEE), they added.