BGP Configuration Guide for Cisco 8000 Series Routers, Cisco IOS XR Releases

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BGP Configuration Guide for Cisco 8000 Series Routers, Cisco IOS XR Releases

L3VPN per-CE label allocation

Updated: June 9, 2026

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Explains L3VPN per-CE label allocation and how it improves VPN label handling for CE-learned routes in a VRF.

L3VPN per-CE label allocation is a VPN label allocation method that

  • assigns one VPN label to VPN routes learned from the same customer edge (CE) device in a virtual routing and forwarding (VRF) instance

  • advertises that label across the backbone to remote provider edge (PE) routers, and

  • improves label granularity compared to the current per-VRF label mode.

Table 1. Feature History Table

Feature Name

Release

Description

L3VPN per-CE label allocation

 Release 26.3.1

Introduced in this release on: Fixed Systems (8200 [ASIC: Q200, P100], 8700 [ASIC: P100, K100], 8010 [ASIC: A100]); Centralized Systems (8400 [ASIC: K100], 8600 [ASIC: Q200]); Modular Systems (8800 [LC ASIC: Q200, P100, K100])

This feature improves label granularity beyond per-VRF mode and addresses a limitation in the existing per-VRF label mode implementation, where only one VPN label per VRF per next hop was supported.

L3VPN per-CE label allocation

The L3VPN per-CE label allocation feature enables BGP to allocate a single VPN label for VPN routes learned from the same customer edge (CE) device within a virtual routing and forwarding (VRF) instance. The PE router then advertises that label across the backbone to remote PE routers.

The new label mode addresses limitations from the existing per-VRF label mode implementation, which allowed only one VPN label per VRF per next hop.

Benefits of L3VPN per-CE label allocation

L3VPN per-CE label allocation provides these benefits:

  • Improves VPN label granularity beyond per-VRF mode.

  • Supports CE-based label handling within a VRF.

Supported L3VPN underlays

The L3VPN per-CE label allocation feature works with these L3VPN underlays:

  • LDP (Label Distribution Protocol)

  • SR (Segment Routing)

  • SR-TE (Segment Routing-Traffic Engineering)

  • BGP-LUoLDP (BGP-Labeled Unicast over LDP)

  • BGP-LUoSR (BGP-LU over Segment Routing)

  • LDPoRSVP-TE (LDP over Reservation Protocol-Traffic Engineering)

  • SRoSR-TE (SR over SR-TE)

How L3VPN per-CE label allocation works

Summary

The key components involved in the process are:

  • BGP (Border Gateway Protocol): Allocates VPN labels for routes received from customer edge (CE) devices.

  • Provider Edge (PE) routers: Advertise VPN labels and manage forwarding to remote PE routers across the network backbone.

Workflow

These stages describe how L3VPN per-CE label allocation works:

  1. BGP allocates one VPN label for VPN routes learned from the same CE in a VRF.

  2. The local PE advertises that label across the backbone to remote PE routers.

  3. Remote PE routers use the advertised label to identify the correct VPN forwarding context.

  4. In UCMP scenarios, the system uses unique forwarding paths to avoid duplicate path handling.

  5. If the system cannot complete label handling successfully, it applies error-handling behavior to preserve forwarding consistency.

Result

L3VPN per-CE label allocation enables scalable and precise VPN traffic management by associating labels with CE-specific forwarding paths, improving resource utilization and error handling within the VPN backbone.