Corporate Average Fuel Economy (CAFE)

Car companies in India will have to cough up stiff penalties from April, 2023 with Parliament approving Energy Conservation (Amendment) Bill 2022 that stipulates heavy fines on a company’s annual domestic sales numbers for violation of mandated Corporate Average Fuel Economy (CAFE) score.

About Corporate Average Fuel Economy (CAFE) –

• Corporate Average Fuel Efficiency/Economy regulations are in force in many advanced as well as developing nations, including India.
• They aim at lowering fuel consumption (or improving fuel efficiency) of vehicles by lowering carbon dioxide (CO2) emissions, thus serving the twin purposes of reducing dependence on oil for fuel and controlling pollution.
• Corporate Average refers to sales-volume weighted average for every auto manufacturer.
• The norms are applicable for petrol, diesel, LPG and CNG passenger vehicles.
• CAFE regulations in India came into force from April 1, 2017.
• Under this, average corporate CO2 emission must be less than 130 gm per km till 2022 and below 113 gm per km thereafter.

CAFE (Corporate Average Fuel Efficiency) and BS6 –

• CAFE (Corporate Average Fuel Efficiency) regulations are similar norms to BS6 but with a different approach towards reducing the carbon footprint in the exhaust gasses of the vehicle.
• CAFE majorly focuses on COx emissions. BS6, on the other hand, focuses on overall emissions which include NOx (Nitrogen Oxides), SOx (Sulphur Oxides).
• The CAFE regulations aim to reduce the overall COx (Carbon Oxides) from the exhaust of the vehicle.
• The reduced carbon footprint leads to increased fuel economy.