Road ministry eyes CAFE-3 carrot for biofuel vehicles

Amid an ongoing tussle over emission norms in the world's third-largest auto sector, the ministry of road transport and highways (MORTH) is likely to ask the Bureau of Energy Efficiency (BEE) to provide incentives to vehicles running on biofuels such as ethanol as well as flex fuels, according to two people aware of the development.

- Subhash Narayan & Manas Pimpalkhare

Corporate Average Fuel Efficiency or CAFE-3 norms are a cap on the average carbon dioxide emissions of a carmaker's entire fleet, and are currently set at 113 grams per kilometre.

The ministry is likely to push for 'biogenic derogation' to be included in the third iteration of the norms, to be enforced from April 2027 at a lower cap of 91.7 g/km. Biogenic derogation refers to concessions given to emissions from flex fuels, ethanol, methanol, and other alternative biofuels.

"We are examining attaching differential weights to vehicles based on different fuel combinations including electric, bio fuels and also on domestic content under the CAFE 3 norms proposed," said the first person quoted above.

Under current CAFE 2 norms, carmakers get benefits for selling cleaner technologies such as hybrid vehicles, electric vehicles, and hydrogen fuel cell vehicles, but vehicles running on biofuels have not been incentivized yet.

MORTH's push for biofuels is likely to provide manufacturers another option to reduce emissions on Indian roads, with the penetration of electric and hybrid vehicles remaining low in most parts of the country.