India’s transportation sector, long seen as a major contributor to rising greenhouse gas (GHG) emissions, stands at a pivotal crossroads. With the Bureau of Energy Efficiency (BEE) releasing its draft proposal for updated fuel efficiency norms – covering Light-, Medium-, and Heavy-Duty Vehicles (LDVs, MDVs, and HDVs) – for public comments by August 28th, India has signaled a strong intent to decarbonize one of its most emissions-intensive sectors: freight transport.
This policy intervention couldn’t have come at a more critical moment. In 2019, India’s transport sector emitted approximately 300 million tonnes (Mt) of CO₂, making it the third-largest emitting sector after electricity generation and industry, according to TERI estimates. Without stringent and forward-looking measures, these emissions are projected to quadruple to 1,200 Mt by 2050. A transformation in how India moves its goods and people is not just necessary – it’s urgent.
The newly proposed norms build upon the foundational Corporate Average Fuel Economy (CAFE) standards already in place for passenger vehicles and earlier iterations of Constant Speed Fuel Consumption (CSFC) norms introduced in 2017 and 2019. But this revision marks a significant leap forward.
Why This Regulation Matters
1. Expanding regulatory coverage
For the first time, the N1 category—light commercial vehicles (LCVs) under 3.5 tonnes—will come under formal regulation. These vehicles, often used by small businesses and urban freight operators, have until now escaped systematic oversight. Regulating this segment closes a major gap and ensures that India’s fuel efficiency strategy is holistic.
2. Moving beyond diesel
The proposed norms expand coverage to all fuel types, not just diesel. This is a timely move, as India’s automotive sector diversifies into electric, hybrid, CNG, and hydrogen fuel cell technologies. Notably, tailpipe emissions from battery electric vehicles (BEVs) are proposed to be counted as zero – a clear policy signal favoring zero-emission transport.
3. Energy security and economic resilience
India imports over 80% of its crude oil—much of it consumed by transport. In 2018, the transport sector alone accounted for 47% of India’s oil product consumption (IEA, 2020). The financial implications are staggering: crude oil consistently dominates the trade deficit. Improving vehicle efficiency directly translates to reduced fuel imports, monetary savings for logistics operators, and enhanced macroeconomic stability.
A Strategic Policy Framework
The proposal sets ambitious performance targets. For example, N1 category vehicles must emit less than 115 g/km of CO₂ under the MIDC cycle, and under 133.4 g/km using the more globally relevant WLTC cycle between 2027 and 2032. This shift toward WLTP-based metrics reflects global best practice and enhances real-world accuracy.
Incentives for advanced powertrains are another highlight. Fuel Cell Electric Vehicles (FCEVs), Battery Electric Vehicles (BEVs), Plug-in Hybrids (PHEVs), and strong hybrids are eligible for volume credits that lower fleet average targets.
Such mechanisms will accelerate the adoption of cleaner technologies, especially in India’s highly fragmented and cost-sensitive freight sector. Policy certainty and technology-neutral credits are essential to encourage OEM investment and consumer adoption.
The Road Ahead: Implementation, Enforcement, Infrastructure
Designing smart regulations is only half the battle. Effective implementation will require:
- Robust compliance systems, including transparent test procedures, data disclosure, and third-party verification through agencies like ARAI and ICAT.
- Industry collaboration, to refine the assumed 16% MIDC-to-WLTP conversion factor for N1 vehicles based on real-world data.
- Public awareness, so that fleet operators understand the long-term cost savings and environmental benefits of adopting efficient vehicles.
Moreover, these norms should be embedded within a broader strategy that includes investments in EV charging and hydrogen refueling infrastructure, clean logistics corridors, and modern freight hubs.
A Transformational Opportunity
India’s freight decarbonization challenge is complex, but this regulation presents a powerful lever to address it. According to research by ICCT, tightening fuel economy norms for trucks could reduce cumulative CO₂ emissions by over 1 billion tonnes by 2050 and save billions of liters in diesel consumption.
What’s more, efficiency norms have a proven track record globally. The U.S. and EU have implemented multiple phases of commercial vehicle CO₂ standards that have driven technological progress without compromising economic growth. India, too, can benefit from such a virtuous cycle.
The BEE’s draft norms represent more than a regulatory update – they are a declaration of intent. Trucks, long emblematic of diesel-fueled economic mobility, can now become the engines of a cleaner, more secure, and globally competitive India.
This regulation can catalyze a freight revolution – if followed through with ambition and discipline. The opportunity to lead is within our grasp. Let us seize it.
Sarika Panda Bhatt is Co-Founder & Trustee, Raahgiri Foundation & Director at Nagarro. Views expressed are the author’s personal.