What’s new in the draft CAFE-III norms? | Explained
The Indian government has released the third draft of CAFE-III norms, which aim to improve fuel efficiency in passenger vehicles by 2031-32. The draft introduces carbon neutrality factors for biofuels and adjusts compliance formulas for different vehicle weights.
Why it matters
These regulations significantly impact the automotive industry's manufacturing strategy and the national transition toward greener transportation.
The story so far: The Centre on Thursday (July 17, 2026) released the third draft of the Corporate Average Fuel Efficiency (CAFE)-III norms for passenger vehicles, proposing to recognise ethanol, compressed biogas (CBG) and other biofuels in compliance calculations by allowing manufacturers specified reductions in declared tailpipe carbon dioxide emissions.
The article provides an objective explanation of government policy and industry implications.
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