The Indian government and its think tank Niti Aayog must think through their fuel policy and clean mobility, and make adequate preparations to limit greenhouse gas emissions
Prime Minister Narendra Modi has recently revived a discussion on India’s automotive fuel policy with an emphasis on electric vehicles (EVs) to fight climate change. “We will soon put in place a stable policy regime around electric and other alternative fuel vehicles,” he said at the Global Mobility Summit in New Delhi on September 7.
A day earlier, Rajeev Kumar, vice chairman of the government’s think tank Niti Aayog, had urged state governments to formulate their own alternate fuel policies, emphasising on electric mobility. As if on cue, major auto and auto component makers in the country such as ABB, Suzuki and Toyota unveiled their plans for EVs and lithium-ion batteries at the summit.
Having publicly declared to allow sale of only EVs in India by 2030 to fight climate change, the Indian government has been moving in fits and starts, unsure of what its policy would be. Should it go for only EVs or opt for a mix with alternate fuel vehicles?
A policy revolving exclusively around EVs was proposed in 2017. Then it was changed in favour of an action plan to push EVs without a policy. Niti Aayog officials and transport minister Nitin Gadkari have been widely reported favouring the latter course.
India needs auto fuel policy
There are three primary reasons for such an initiative — to ensure lower greenhouse gas (GHG) emissions; ensure energy security and reduce imports; and limit adverse impacts of air pollution on health.
A substantial part of India’s oil, gas and coal supply are imported. Its crude oil and natural gas import increased from 73% and 17% in 2005-06 to 81% and 40% in 2015-16, respectively. Crude oil import, which was below USD 100 billion from 2014-15 onwards, is projected to go up to USD 105 billion in 2018-19 due to rising prices. Import of thermal and coking coal has been going up in recent months. This is a huge drain on India’s foreign exchange reserves.
A Niti Aayog report says adoption of electric and shared vehicles could save USD 60 billion in diesel and petrol costs and cut down one gigatonne (GT) of carbon emissions by 2030.
Vehicular emissions may not be the only source of air pollution but is a very big contributor. A 2017 report by the Lancet Commission on Pollution and Health says that with an estimated death of 2.51 million in 2015 due to air pollution, India ranked first in the world in pollution related deaths, accounting for 28% of such deaths globally. Fuel combustion accounted for 85% of airborne particulate pollution and for almost all pollution by oxides of sulphur and nitrogen.
Existing automotive fuel policy
After the Supreme Court intervened in the 1990s, Delhi and other metros adopted a cleaner CNG fuel. There have been two fuel policies, in 2001 and 2014, since then. India’s Auto Fuel Vision and Policy 2025 laid out a roadmap for the transition to BS-IV norms by April 2017, BS-V by April 2020 and to BS-VI by April 2024.
Since then, there have been rapid-fire announcements. In August 2017, the Ministry for New and Renewable Energy declared that only EVs would be produced and sold in the country by 2030. In November 2017, the oil ministry set a deadline for rolling out clean fuel, BS-VI grade fuel, in Delhi from April 2018 and in the National Capital Region (NCR) around Delhi by April 2019. The industry was asked to roll out BS-VI vehicles from April 2018, from an earlier deadline of April 2020.
In November 2017, the transport ministry said India would have only electric cars by 2030.
Niti Aayog’s flip-flop
In May 2017, Niti Aayog released a study called India Leaps Ahead: Transformative Mobility Solutions for All that was in support of EVs, declaring that India can save 64% energy and 37% carbon emissions in 2030 by adopting EVs. It said EVs would also bring energy security and reduce the country’s import bill.
But soon, it had a change of heart. Niti Aayog member V.K. Saraswat went public in January 2018 stating that transforming the entire transport sector to electric power was “not viable” because of high investment needed to import raw materials for manufacturing lithium-ion batteries. This would also continue import dependence. Moreover, it would not be advisable to depend on only one form of fuel.
He suggested a mix of conventional internal combustion engines with electric vehicles, hybrid vehicles, CNG-run vehicles and other evolving technologies, particularly ethanol and methanol-based engines.
Niti Aayog also issued a policy paper — India’s Leapfrog to Methanol Economy — advocating a shift to methanol-based fuel policy, citing many advantages of such a shift. But the ministries of power, transport and oil rejected it.
State of preparedness
At the same time, no data is available on the status of transition to BS-IV and V vehicles or fuels. A 2016 report of Environment Pollution (Prevention and Control) Authority (EPCA), however, paints a dismal picture. It says BS-IV vehicles are available in over 30 cities of India, but not across the country. Trucks and other heavy vehicles continue to be registered as BS-III. It says the automobile manufacturers are ready to produce only BS-IV vehicles.
So, where does that leave India’s auto fuel policy? This is difficult to answer.
Conversion to cleaner energy has a cost, for both refineries and auto industries. The 2016 EPCA report says an investment of INR 800 billion (USD 11 billion) is needed by the refineries alone. There is no estimate for the industry but when the target was set for 2020, a Mahindra & Mahindra executive had said it was akin to climbing the Everest in a month as it involved upgrading and overhauling the entire manufacturing ecosystem.
Now, coming back to the Prime Minister’s declaration about a new fuel policy, we will have to wait for Niti Aayog to unveil its framework to know the details. While it is at work, let us hope that the think tank sets realistic goals taking into account the state of preparedness, availability of resources and multiplicity of ministries involved in policy making and regulations.
But, most important of all, let us hope Niti Aayog adopts a mix of EVs, hybrid vehicles, CNG-run vehicles and other evolving technologies, particularly ethanol and methanol-based engines. It may not be such a good idea to rush in without thinking it through and planning it in a proper and thorough manner.
Prasanna Mohanty is a senior journalist who has been writing on energy issues for many years.
Eds: The plan for electric vehicles to the exclusion of other forms of clean alternate fuels has been critiqued by India Climate Dialogue in the past. See: Why electric car dreams lead to a blind alley