The proposed Corporate Average Fuel Efficiency (CAFE) III norms have sparked a debate among Indian automobile manufacturers. The new regulations set fuel-efficiency targets based on the average unladen weight of all cars sold by a manufacturer in a year. Regulation details A closer look at CAFE III norms The Indian government first introduced CAFE standards in 2017 under the Energy Conservation Act, 2001. The second set of rules, CAFE II, was enforced in 2022 with stricter targets, fuel-efficiency target lowered to 4.7 L/100km and CO2 cap tightened to 113 g/km. Manufacturer reactions Industry response and concerns The proposed norms have divided the industry, with small-car-focused manufacturers supporting the provisions but warning that unrealistic emission targets could lead to severe pricing implications.