No consensus in the industry over concession to small cars in CAFE norms: Sources

The core of the disagreement revolves around how CAFE norms calculate targets
| Photo Credit:
KRISHNAN VV

The debate on giving concession on emission norms to small cars remained inconclusive, in a meeting held on Friday among members of the auto industry body Society of Indian Automobile Manufacturers (SIAM) including Maruti Suzuki India.

Sources told businessline that the members have agreed to keep the matter on small cars as an ‘addendum’ in their various representations. The meeting on Saturday was also attended by past Presidents like Pawan Goenka. Largely, most members were of the view that the matter of the small cars should be treated separately.

This was the first internal meeting after the Ministry of Heavy Industries (MHI) in its meeting in June told SIAM and its members to discuss among themselves on the matter.

The auto industry has broadly urged the government to extend the Corporate Average Fuel Efficiency (CAFE)-3 norms, citing concerns over the steep fall in sales of light commercial vehicles (N1 category) and small cars. However, not all industry players are in agreement with a blanket concession, particularly concerning the N1 category, arguing that it would undermine the fundamental purpose of the constant speed fuel consumption (CSFC) norms for commercial vehicles, which are similar to CAFE norms and involve testing fuel efficiency at specific, constant speeds.

The core of the disagreement revolves around how CAFE norms calculate targets. Under current and proposed CAFE frameworks, the allowable CO2 emissions are linked to a vehicle’s weight; heavier vehicles are permitted to emit more. Maruti Suzuki argues that this weight-based approach inherently disadvantages smaller, lighter cars by subjecting them to disproportionately stricter emission targets, even though these vehicles naturally emit less CO2 and consume fewer materials in manufacturing.

Conversely, automakers primarily focused on larger vehicles, such as SUVs ( such as Tata Motors, Mahindra & Mahindra, and Toyota), oppose relaxing norms for small cars.

In a meeting held on March 10, 2025, the Bureau of Energy Efficiency (BEE) had proposed CAFÉ based CSFC norms as the next phase of fuel emission norms from April 2027.

Meanwhile, the BEE on Monday came out with an “Office Memorandum”, inviting comments on a draft proposal for future fuel efficiency norms for heavy-duty vehicles (HDVs), medium-duty vehicles (MDVs), and light-duty vehicles (LDVs). 

Based on the findings of a study, BEE has prepared the draft in which it has included other key elements too including — methodology for establishing new fuel consumption baselines – and expansion of coverage to include all fuel types used in commercial vehicles (beyond diesel).

In April 2022, the Ministry of Power had implemented the Phase-Il of the CAFÉ Norms for passenger cars, and Phase-I of Fuel Economy Norms for light and medium commercial vehicles (LMCVs) and HDVs.

Published on July 28, 2025

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