CAFE 3 Norms: These days, the Indian automobile market is heated not only by the speed of vehicles but also by the clash of words. Companies with big engines are accused of creating a wrong narrative against small car manufacturers. With the arrival of the proposed CAFE-3 rules, the industry has been divided into two camps, and the fight for efficiency that is raising the most questions is the one whose objective is clearly to reduce pollution and make cars more fuel efficient.
Discounts on small cars, anger among big players
There is talk of giving some relief to small and light vehicles on the basis of weight and economy segment in the proposed CAFE-III (Corporate Average Fuel Efficiency) standards. A big difference of opinion has emerged in the industry regarding this. Some companies including Tata Motors are opposing this relief. Their argument is that the rules should apply equally to everyone and it would be wrong to give different treatment to small cars.
On the other end, Maruti Suzuki For example, major manufacturers believe that the purpose of CAFE-III is to improve the efficiency of larger, heavier and more fuel-efficient vehicles, and not to put additional pressure on smaller cars.
Big statement of Rahul Bharti of Maruti Suzuki
During the monthly sales briefing last Monday, Rahul Bharti, Senior Executive Officer, Corporate Affairs, Maruti Suzuki, openly said that some companies are using “wrong facts and narratives”. He alleged that big engine companies were targeting small cars to divert attention from their ‘gas-guzzler’ vehicles.
Bharti said that “wrong facts and narratives are being spread by some big gas-guzzler companies in a very irresponsible manner to divert people’s attention from their big engine vehicles.” According to Bharti, this debate should be about technology and environment, and not about arguments whose purpose is to divert the discussion.
What is the new proposal of CAFE-3?
Actually, the Bureau of Energy Efficiency (BEE) had released the draft of CAFE-3 rules in June last year. Under this proposal, the average CO2 emission limit is to be reduced from 113 grams CO2/km under the current CAFE 2 rules to 91.7 grams CO2/km. However, this limit has been made more stringent in the new draft. In the first year it will be 88.4 grams CO2/km, after which in the following years it will reduce to 84.7 grams, 81.9 grams, 76.4 grams and 71.5 grams respectively. That means the emission limit will be reduced gradually every year.
Year-on-year CO₂ emission limits:
In 2027: 88.4 g/km
In 2028: 84.7 g/km
In 2029: 81.9 g/km
In 2030: 76.4 g/km
In 2031: 71.5 g/km
Relief to sub-4 meter petrol cars
According to the report of Business Standard, Maruti Suzuki had approached CAFE regarding the new rules and demanded changes in the rules. After which, in the new draft, special relief was given for sub-4 meter (i.e. smaller than four meters length) petrol vehicles. Vehicles whose weight is up to 909 kg, engine capacity up to 1200 cc and length is less than 4000 mm will get special benefits. These cars have been given a benefit of 3 grams in calculating carbon dioxide (CO2) emissions under Corporate Average Fuel Efficiency (CAFE 3) rules.
The real root of the dispute… giants face to face
There is also news that Maruti Suzuki is not satisfied with the new draft. The changes in the rules were not made as per the demand of the company, but still it is a matter of relief for the company. Senior officer of Maruti Suzuki, Rahul Bharti says that BEE should make separate rules for small cars. Other automakers are opposing weight-based discounts.
These companies include brands like Tata Motors, Mahindra, Hyundai and MG Motors. Jinke believes that the direct benefit of the weight based rule will be given to those car companies whose portfolio includes more cars whose weight is below 909 kg. In this matter, these big companies have also written a letter to the government and termed the weight-based emission allowance as “arbitrary”.
Recently, Shailesh Chandra, Managing Director and CEO of Tata Motors Passenger Vehicles (TMPV), had said, “There is no point in making changes in CAFE-3 or exempting any particular category of cars.” Let us tell you that the existing CAFE-2 rules are applicable till March 2027 and CAFE-3 norms are proposed to be implemented from April 2027.
What are CAFE norms?
Also abbreviated as Corporate Average Fuel Efficiency (CAFE). CAFE standards were first issued by the government in 2017 under the Energy Conservation Act, 2001, to reduce carbon (CO₂) emissions by reducing fuel consumption.
This is a government rule that sets a minimum or average fuel efficiency for any vehicle. Which has to be fulfilled by all the vehicles sold in India by the car manufacturer. This is a standard to decide the mileage of a car. This rule helps companies produce high-efficiency cars by averaging the fuel economy of all models.
The path of rules is difficult, the debate is still going on
There will be several rounds of discussions regarding the proposed CAFE-III rules. But it is certain that the debate on fuel efficiency in the Indian auto industry has become not just about technology but also about marketing strategies. In the coming months, it will be interesting to see how the rules are implemented and whose arguments the government finds more logical.
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