India’s Road to Cleaner Mobility: Draft CAFE III Norms
Environment · Tuesday, 28 July 2026
The Ministry of Power circulated the draft CAFE III norms setting stricter fleet-wide CO2 emission limits for FY2027–32. The proposal aims to reduce emissions to 77 gCO2/km by FY2031–32 while accelerating EV adoption.
Quick highlights
- Targets reduction from 113 gCO2/km to 77 gCO2/km by FY2031–32.
- Administered by BEE under Energy Conservation Act, 2001.
- EV share in India ~4% of new car sales (2025).
- Credit buyout price ₹2,500–₹4,500 per gCO2/km.
Context
The third draft notification of CAFE III was circulated for consultation, tightening passenger vehicle emission standards for FY2027–32.
Key Facts
CAFE standards set sales-weighted fleet CO2 targets. Draft aims for 77 gCO2/km by FY2031–32. EV penetration in 2025 stood at about 4%. Buyout credits priced between ₹2,500 and ₹4,500 per gCO2/km.
Significance
Cleaner mobility reduces crude import vulnerability, urban air pollution, and supports Panchamrit and net-zero 2070 goals. Strengthens domestic EV manufacturing.
Challenges / Way Forward
Low buyout pricing and super-credits may dilute targets. Suggested reforms include dual-credit system, higher penalty alignment, WLTP testing adoption, and rationalized ethanol incentives.
Exam Angle
GS III: Environment, Energy Security, Climate Change. Link with COP26 commitments and sustainable transport policy.
Remember this
- CAFE III period: FY2027–32.
- Target: 77 gCO2/km.
- Administered by BEE.
- EV share India 2025: ~4%.