MoRTH may bat for biofuel vehicles in CAFE 3 norms input to BEE

Mint

2 days ago

New Delhi: 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.
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.
MoRTH 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 carbon emissions on Indian roads, with the penetration of electric and hybrid vehicles remaining low in most parts of the country.
'The plan will help address the concerns of the auto industry that keeping emission down with just one alternative fuel option by way of electric vehicles would be difficult as penetration of these vehicles still remains low. Now companies could push for attaining Cafe 3 norms by widening the fuel option for the vehicles,' said the person mentioned above.
'The weight system is still under discussion and once it is finalized, the same would be recommended to the panel that is finalizing Cafe 3 norms,' said the second person mentioned above.
Email queries sent to MoRTH and BEE remained unanswered till press time.
India's electric vehicle penetration for four-wheelers has risen up to 2.6% at the end of FY25, with a little over 100,00 electric cars sold out of more than 3.8 million cars.
Biofuels are fuels produced from organic matter, or biomass, such as plants and agricultural or industrial waste. They can be used as a replacement for or in addition to fossil fuels like diesel and gasoline, and can also be used to generate heat and electricity. Biofuels are considered a renewable energy source because the biomass used to produce them can be replenished. They also help in containing CO2 emissions when used as fuel in vehicles.
CAFE norms follow a 'super credit' system, wherein concessions are given for using cleaner forms of technology on the road. For instance, under current norms, the sale of an electric car is counted as three sales, while that of a fossil fuel car is counted as a single sale. This form factor multiple helps carmakers keep total fleet emissions low, as the average fuel efficiency is the total fleet emissions per sale.
A publicly available BEE invite for stakeholder consultations in June 2024 noted that the sale of one strong hybrid car would be counted as two, that of a plug-in hybrid car would be 2.5, and electric and hydrogen fuel cell cars would be counted as three.
BEE proposed in those consultations to increase these incentives for electric and hydrogen cars, but reduce it for hybrids.
Auto industry body Society of Indian Automobile Manufacturers (Siam) proposed in December 2024 the inclusion of a 'biogenic factor' in CAFE 3 norms.
'SIAM has proposed that CO2 produced from the combustion of biofuels should be classified as "green CO2" and therefore treated as zero, being biogenic CO2. This means that if a car runs on some blend of biofuel and petrol, the CO2 emissions from the biofuel component should be subtracted from the total tailpipe CO2 emissions for the purpose of CAFÉ calculation,' the letter dated 23 December 2024 said.
Siam proposed to subtract 14.3% of a vehicle's tailpipe emissions if it was running on E20 flex fuel. E20 is a blend of ethanol (20%) and gasoline (80%).
Indian carmakers are gearing up for the flex fuel shift.
'Hyundai Motor India Ltd. (HMIL) has actively participated in the auto industry's discussions on CAFÉ 3 norms, with its views submitted to the Government via SIAM in December 2024. We remain steadfast in our pursuit of smart, sustainable, and future-ready mobility solutions for India. We would not be able to comment further on the discussions on CAFÉ 3 till we receive any official communication from the Government,' said Puneet Anand, AVP and Vertical Head (Corporate Affairs, Corporate Communication & Social), HMIL.
Anand added, 'Currently, HMIL offers E20-compliant vehicles in line with prevailing Government regulations. In India, HMIL continues to deliver mobility options tailored to diverse consumer needs, spanning Petrol, Diesel, CNG, and Electric vehicles. Looking ahead, Hyundai Motor Company globally leads in propulsion technologies, encompassing ICE, CNG, Flex-Fuel, Hybrid, Electric and Hydrogen solutions.'
'HMIL remains committed to supporting the Government of India's vision for energy security, reduction in oil imports, and rural economic upliftment through the promotion of flex fuel technologies. In alignment with this, at the Bharat Mobility Global Expo 2025, HMIL unveiled the first working prototype of the flex fuel-powered Hyundai CRETA, equipped with advanced powertrain technology capable of operating on fuel blends ranging from E0 to E100. This innovation underscores our dedication to sustainable mobility, as flex fuel vehicles powered by ethanol — a biogenic fuel — offer reduced net carbon emissions, enhanced performance, and potential economic benefits for consumers, especially with supportive Government policies on fuel availability and incentives.'
Flex fuel vehicles are equipped with internal combustion engines that can operate on more than one fuel. They are primarily meant to run on ethanol and methanol or a blend of biofuels and on conventional fuels such as petrol or diesel. These engines can also run on various levels of ethanol blended in conventional fuels - typically from typically from E20 (20% ethanol) up to E100—without needing significant modifications in performance.