CAFE Regulations, or Corporate Average Fuel Efficiency/Economy regulations, which came into force in India from April 1, 2017 onwards, aim at lowering fuel consumption (or improving fuel efficiency) of vehicles by lowering carbon dioxide (CO2) emissions, thus reducing the dependence on oil for fuel and controlling pollution.
Corporate Average refers to sales—volume-weighted average for every auto manufacturer. under this, the average corporate CO2 emission must be less than 130 gm per km till 2022 and below 113 gm per km thereafter. The norms are applicable for petrol, diesel, LPG, and CNG passenger vehicles.
As pollution caused by the growing number of vehicles on road is worsening the air quality in many cities, upgrading to stricter fuel standards can help tackle air pollution. CAFE regulations have the ability to reduce the carbon footprint of the auto industry.
The National Auto Policy (draft) in early 2018 suggested the reduction in CO2 emissions through CAFE regulations. It called for defining corporate average CO2 gm per km targets for all passenger vehicle manufacturers from 2020 in order to match Indian CO2 reduction targets to those set by developed countries by 2025. This policy also suggested the imposition of economic penalties on manufacturers who do not meet corporate average targets and envisaged a system where credits are given under the scheme for achieving better than mandated fuel efficiency and these can be banked and traded.
UPSC Exam Preparation eBooks
Owing to rising levels of air pollution in Indian metropolitan cities, courts and policymakers have been coming up with ad-hoc solutions, such as implementation of the BS-VI emission norms from April 2020 onwards, shifting to the use of electric vehicles by 2030, and putting the CAFE regulations into effect, to help people breathe cleaner air. It is expected that stricter CAFÉ targets would lead to manufacturers moving to electric vehicles or strong hybrid vehicles over time to comply with the norms.
CAFE versus BS
The main focus of CAFE regulations is on reducing CO2 emissions, while that of BS VI is to minimise the harmful exhaust from vehicles. The BS IV-compliant fuel has 50 parts per million (ppm) sulphur. But BS VI stipulates a low 10 ppm. Also, under BS VI, particulate matter emission for diesel cars and nitrogen oxide levels are expected to be markedly lower than in BS IV.
A mass shift to electric vehicles would help curb air pollution. To encourage the manufacture and sale of electric vehicles, the government is already providing incentives under the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) scheme.