Overview
- The Ministry of Power circulated a revised draft of CAFE‑III for passenger vehicles on Thursday, July 16, opening a consultation that runs until August 6 for rules covering 2027–28 to 2031–32.
- The draft tightens fleet‑average targets year by year, cutting the benchmark from 3.996 litres/100 km (94.76 gCO₂/km) in 2027‑28 to 3.3273 litres/100 km (78.90 gCO₂/km) by 2031‑32 to push manufacturers toward cleaner fleets.
- It creates a tradable credit‑debit market where makers that outperform targets earn credits and shortfalling firms can buy credits from peers or from BEE at a buyout price that starts at ₹2,500 per gCO₂/km in FY28 and rises by ₹500 each year to ₹4,500 by FY32, with unused credits lapsing at the end of each compliance block.
- Tata Motors Passenger Vehicles has formally asked the government to stop BEE from acting as a seller of credits, arguing regulator participation would distort price discovery, and it wants market‑first purchases and carry‑forward rules for genuine over‑compliance; other OEMs have raised related fairness concerns during long industry talks.
- The draft also formalises Carbon Neutrality Factors to give ethanol, CBG and biofuels lifecycle benefits, keeps super credits for EVs and hybrids, allows up to 9 gCO₂/km of tech credits, and requires MIDC plus WLTP reporting, a shift that changes testing, compliance timing and investment incentives for manufacturers and buyers.