India Gears Up for Two-Wheeler CAFE Norms

The Indian government is planning to introduce Corporate Average Fuel Efficiency (CAFE) norms for motorcycles and scooters, with an effective date of April 2028. This policy initiative will encompass the two-wheeler segment, India's largest vehicle category, bringing it under fuel efficiency regulations for the first time. This move is anticipated to significantly impact the nation's annual petrol consumption, which currently stands at 42.6 million tonnes, and contribute to India's energy security goals.

The Bureau of Energy Efficiency (BEE) is currently in discussions with two-wheeler manufacturers and industry bodies like SIAM and ACMA to establish a methodology for measuring emissions across various powertrains. This includes potentially linking engine displacement to CO2 emissions for internal combustion engines and motor capacity to CO2 values for electric two-wheelers. The government aims to reduce fuel consumption and further its decarbonization agenda.

While the policy is expected to encourage diversification of powertrains and potentially increase electric vehicle (EV) penetration, industry experts have expressed some skepticism. They note that Indian two-wheelers are already quite efficient, and there might be limited scope for further gains. Concerns also exist regarding the cost-sensitive nature of the market and the adaptability of the two-wheeler sector to different fuel types and technologies at scale. The government's proposal for two-wheeler CAFE norms follows earlier recommendations from Niti Aayog and reflects a broader push towards energy efficiency and reduced reliance on imported crude oil.