The 3 damage that Inferno Elemental deals as a result of its ability is not combat damage. Inferno Elemental will still deal its combat damage as normal (unless all the creatures that blocked or were blocked by it have left the battlefield by the time the combat damage step begins).

Inferno Elemental’s ability resolves during the declare blockers step, before even first strike damage is assigned. If the damage dealt to another creature this way is lethal damage, that creature will be destroyed before it can deal its combat damage.

Inferno Elemental’s ability will trigger for each creature it blocks or becomes blocked by.