Ethanol Lobby Pushes Back on CAFE-III Norms, Demands Level Playing Field with EVs

India's apex body for ethanol manufacturers, the All India Distillers' Association (AIDA), has written to the Ministry of Petroleum and Natural Gas urging a significant overhaul of the draft Corporate Average Fuel Consumption (CAFE-III) norms covering the period FY 2027–28 to FY 2031–32.

In a letter dated April 22, 2026, addressed to Secretary Dr. Neeraj Mittal (IAS), AIDA President Vijendra Singh argued that the current draft framework is "strategically imbalanced," favouring battery electric vehicles (BEVs) and plug-in hybrids through generous volume derogation factors, while leaving standalone Flex-Fuel Vehicles (FFVs) — which run on ethanol-blended fuel — with a comparatively weak incentive of just 1.1.

AIDA has made four concrete demands. First, it wants the Volume Derogation Factor for FFVs raised to at least 2.0–2.5. Second, it is calling for a technology-neutral, portfolio-based compliance structure that co-incentivises electrification, hybridisation, and ethanol-based solutions equally. Third, it wants CAFE-III harmonised with India's Ethanol Blending Programme (EBP), including the roadmap beyond E20. Fourth, it seeks formal recognition of well-to-wheel lifecycle emissions benefits of domestically produced ethanol feedstocks within the regulatory framework.

AIDA contends that FFVs offer an immediately deployable, cost-effective decarbonisation route that sidesteps the infrastructure challenges and import dependencies associated with rapid electrification.