AIDA requests Petroleum Ministry for stronger incentives for FFVs under the CAFE-III framework
AIDA has urged the Petroleum Ministry to revise CAFE-III norms, highlighting bias toward electric and hybrid vehicles over ethanol-based flex-fuel vehicles. It called for higher incentives, technology-neutral policies, and alignment with India’s ethanol blending goals to ensure balanced, cost-effective, and sustainable decarbonisation pathways for the auto sector.
AIDA has asked the Petroleum Ministry to revise the proposed CAFE-III norms, saying the draft framework favours electric and plug-in hybrid vehicles while giving inadequate incentives to ethanol-based Flex-Fuel Vehicles (FFVs).
In a letter to Dr Neeraj Mittal, Secretary, Ministry of Petroleum & Natural Gas, AIDA has said that the proposed transition to WLTP-linked metrics and the incorporation of advanced compliance instruments reflect a significant evolution from earlier CAFE phases. These are important steps towards aligning India’s regulatory framework with global best practices.
“However, based on our detailed analysis, we respectfully submit that the current draft framework appears strategically imbalanced in its treatment of different decarbonisation pathways. While it strongly incentivises battery electric vehicles (BEVs) and plug-in hybrid vehicles through high volume derogation factors, the relative positioning of ethanol-based solutions, particularly standalone Flex-Fuel Vehicles (FFVs), is significantly weaker,” the letter stated.
Specifically, the Volume Derogation Factor (VDF) of 1.1 for standalone FFVs does not adequately reflect their contribution to emissions reduction, energy security, and alignment with India’s Ethanol Blended Petrol (EBP) Programme. This is particularly concerning given the substantial national investments and policy support extended towards scaling up ethanol production and adoption.
AIDA said that such an approach risks creating a policy misalignment, where the CAFE framework does not fully complement India’s broader bioenergy and rural development objectives. Ethanol-based mobility solutions, especially FFVs, offer an immediately deployable, cost-effective, and domestically anchored pathway for decarbonisation-without the infrastructure and import dependencies associated with rapid electrification.
AIDA has submitted the following recommendations for consideration:
- Revision of FFV Incentives:
Increase the Volume Derogation Factor (VDF) for standalone Flex-Fuel Vehicles from the proposed 1.1 to at least 2.0-2.5, to appropriately reflect their environmental and economic benefits.
- Adoption of a Technology-Neutral, Portfolio-Based Approach:
Reframe the compliance structure t o encourage a balanced technology mix, where electrification, hybridisation, and ethanol-based solutions are co-incentivised. This would ensure a more resilient and diversified pathway towards decarbonisation, rather than a de facto prioritisation of a single technology.
- Alignment with National Bioenergy Goals:
Ensure that the CAFE-III framework is harmonised with the objectives of the Ethanol Blending Programme (EBP), including the roadmap beyond E20, so that regulatory signals remain consistent across sectors.
- Recognition of Lifecycle Emissions Benefits:
Incorporate a more robust recognition of well-to-wheel emissions reductions associated with ethanol fuels, particularly in the context of domestically produced renewable feedstocks.
The Association has said that it would like to engage further with the Ministry to share detailed insights on the same and support the development of a more aligned and effective framework.
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Source : ChiniMandi
