Corporate Average Fuel Efficiency Norms

Corporate Average Fuel Efficiency norms limit the average fuel consumption of all passenger vehicles sold by a manufacturer, rather than imposing one identical efficiency threshold on every model. They use a sales-weighted fleet average, commonly expressed through fuel consumption or corresponding CO2 emissions, to assess annual compliance.

How the fleet standard works

Each manufacturer receives a corporate-average target linked to the average mass of its passenger-vehicle fleet. Fuel consumption is determined under the prescribed test procedure, and each model's result is weighted by the number of vehicles sold during the compliance period.

• The fleet average gives high-volume models greater influence than low-volume models because compliance is sales-weighted.
• A manufacturer may sell vehicles with relatively high fuel consumption if they are sufficiently offset by more efficient vehicles within the same corporate fleet.
• The mass-based formula recognises that heavier fleets generally require more energy, while still requiring manufacturers to improve overall efficiency.

Compliance and regulatory basis

The Central Government prescribes passenger-car fuel-consumption standards under the Energy Conservation Act, 2001, with the Bureau of Energy Efficiency administering the framework. Manufacturers must submit prescribed fleet and test data so that their corporate average can be compared with the applicable standard.

• Compliance is assessed for the manufacturer's fleet as a whole over the specified period, not merely through the certification of an individual model.
• The framework encourages changes in vehicle technology, design and product mix, including greater sales of fuel-efficient and electric vehicles.

Environmental significance

Lower fuel consumption reduces petroleum use and tailpipe carbon dioxide emissions, which are closely related to the quantity of fuel burned. CAFE norms therefore complement, rather than replace, Bharat Stage emission standards.

• CAFE norms primarily address fleet-level energy efficiency and CO2 emissions.
• Bharat Stage standards set vehicle-level limits for regulated air pollutants such as carbon monoxide, nitrogen oxides and particulate matter.

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