India will be emitting more carbon dioxide in 2040, not less. The International Energy Agency (IEA) projects India’s CO2 emissions to rise to 3.8 giga tonne by 2040 from 5 giga tonne in 2019—under the Stated Policies Scenario. This suggests, that if we actually wish to bring down emissions, our policies must change.
What’s more alarming, is the quantum of increase and its likely impact on air quality. IEA said, "A 50 percent rise in India's CO2 emissions to 2040 is the largest of any country in the STEPS, even though India’s per capita CO2 emissions remain well below the global average. The increase in India’s emissions is enough to offset entirely the projected fall in emissions in Europe over the same period”. If not for the sake of the world, but for our own, we need to act swiftly.
INDIA ENERGY DEMAND SCENARIO
Primary Energy Demand (Mtoe)
Total Consumption (Mtoe)
Electricity Demand (TWh)
CO2 Emissions (Gigatonnes)
Coal Demand (Mtoe)
Natural Gas Demand (bcm)
Oil Demand (mb/d)
Source: IEA - India Energy Outlook
INDIA ENERGY DEMAND SCENARIO
In this context, it is important to appreciate that transportation, though the most visible polluter, isn’t the biggest contributor to emissions causing climate change. The graphic below from the World Resource Institute provides a snapshot of the real picture and suggests the green fight needs to be a multipronged one.
BROAD, NEUTRAL POLICIES HAVE DELIVERED
Even in transportation, a multi-pronged approach is what has been advocated globally. The International Organisation of Motor Vehicle Manufacturers advocates an approach that encompasses better vehicle technology, use of alternative fuels, driver behavior, better road infrastructure to reduce congestion and encouragement of consumer adoption.
What’s equally important, is a neutral and technology agnostic policy approach. The Euro emission norms for automobiles, for one, have clearly been delivered. CO2 emissions in Europe have almost halved from 1995. The reason: they have been focused on emission reduction, not how you get there. That’s been left to the industry to decide.
EU EMISSION TREND
CO2 Emissions from Vehicles in EU
PV - CO2/km (gms)
CV - CO2/km (gms)
These CO2 savings have been achieved in conjunction with decreases in pollutants such as nitrogen oxides (NOx) and particles (PM) through the introduction of the Euro standards – despite these initiatives requiring conflicting measures.
GETTING THE GOALS RIGHT
If India needs to bring down green emissions, while also lowering import dependence (especially on fossil fuels) and driving economic growth, it needs to offer a policy framework that encourages green consumption, incentivizes fuel substitution and provides an impetus to growth through expansion. Not a policy that binds itself to a path—like for electric vehicles (EVs)—where lack of supporting infrastructure and high cost of acquisition can stymie the progress.
Phrases like "leapfrog to the future" sound good on paper. Execution challenges and the viability of going down a certain path suggest the need for a more pragmatic approach. But let’s break down the three aspects—consumption, energy and growth.
On the consumption front, a recent survey by CNBC-TV18 of 1,300 respondents revealed that consumers aren’t ready to pay much more up-front for an EV, despite the green quotient and lifetime cost of ownership. The BloombergNEF EV Outlook 2021 (BNEF) also points out that: "EVs (will) take longer to spread in India, Southeast Asia and our Rest of World countries, where policy support is limited and stripped down, and low-cost internal combustion vehicles are hard to beat on price." So, India needs to think of other more affordable alternatives or ways to make EVs more affordable.
In terms of the energy mix, substituting oil for electricity seems like a good idea from san import dependence perspective. But India has challenges with its power sector and even for renewables, while capacity is likely to expand rapidly, storage of energy generated through these sources remains a big challenge. BNEF suggests that electricity demand can surge to 4483 TWh by 2040, up 60 percent from 2030, and further to 8524 TWh by 2050. And the rapid growth in electricity demand can pose a challenge for a growing economy if one more sector like mobility becomes significantly dependent on it.
And mind you, even in 2040 in India, coal will account for about 34 percent of power generation, compared to 44 percent now. So, that isn’t a very green scenario.
India needs to optimise its energy resources to drive economic growth while balancing the green agenda from a macro perspective. But even from an auto industry standpoint, there is a need to transition to a battery-powered electric vehicle (BEV) world. Industry sources point out that the components required in the entire range of EVs (XEVs) comprising BEVs, Plug-in Hybrid EVs (PHEVs), Hybrids (HEVs) and Fuel Cell Vehicles (FCVs) are mostly the same.
The difference between an internal combustion engine (ICE) powered vehicle and an HEV is an additional electric power train (1.2-1.8kwh batteries), and this extends to PHEVs (7-9kwh batteries, for running on pure EV mode), BEVs (30-40kwh) and Hydrogen FCFs. So, by migrating to an auto-component ecosystem geared to power XEVs, India can keep in closer step with global auto needs that have a higher XEV dominance.
In addition, likely India is doing, we must explore biofuels and hydrogen fuel cells aggressively as other fuel alternatives. This is also because the segments that will likely see higher EV traction in the coming years are those of 2 & 3 wheelers that account for about 80 percent of India’s vehicles on the road, but only 20 percent of total vehicular oil consumption. And the biggest guzzler, commercial vehicles, are seen best run on hydrogen fuel cell technology.
A policy framework that provides room for experiment and innovation is more conducive to delivering successful outcomes. Taxation and incentives must be focused on goals, not on how to get there. So whether one player opts for an EV or a hybrid or a biofuel or FCF strategy should hardly matter. Let players decide their path, winners and losers in the industry will emerge, but the country will gain from the drive to cut emissions and oil dependence. If taxes and incentives are linked to a reduction in emissions on a vehicle model basis, there will be an incentive for the industry to move faster to a greener strategy. And this can help cut CO2 emissions more swiftly.
Also read: View: Smart and scalable electric vehicles charging infrastructure a must for driving sales
Whether players get to the goals by light-weighting vehicles, without compromising safety, or by switching to alternative fuels or powertrain technologies shouldn’t matter. If an automaker can develop a 100% bio fuel-powered vehicle, so be it. Why should policymakers care if Elon Musk discovers a secret energy source on Mars and uses the magic green to power his vehicles? The end, not the means should count.
The government needs to encourage innovation, even jugaad. Remember the LPG cylinder you could fit in your Premier Padmini’s boot and switch-off from gasoline with a homegrown kit to cut your commute costs? Without getting into the legalities and moralities of misusing subsidised LPG and so on, the idea is that we must create room for exploration, invention and entrepreneurial drive.
NEED FOR A HYBRID WORLD
The limitations of power infrastructure and public charging stations coupled with the high cost of EV adoption can put a serious spanner in India’s EV ambition. To get the ball rolling, it looks logically so much more feasible to open up the market to hybrids by correcting the existing taxation and incentive structures. Did you know that in India, the tax rates on hybrids are a little different from those of ICE powered vehicles? That just makes the hybrids a no, no because they are essentially vehicles powered by dual powertrains—ICE + electric—and the costs of production are therefore significantly higher. This offers little incentive for consumers to opt for more green alternatives.
Also read: Electric two- and three-wheelers, charging infra and more: Hero MotoCorp’s EV gameplan explained
Globally, the policies are more encompassing. In Germany and France, for instance, taxes are linked to CO2 emissions, irrespective of fuel technology, though there are some incentives to encourage EVs as well. China too recently recognised the XEV factor. While earlier it mandated about 10 percent of sales for an automaker of ICE vehicles should be EVs, it now calls for only 1-2 percent of EV sales against sales of hybrids. Thailand and Indonesia have gone even a step further, keeping the affordability factor in emerging economies in mind, by CO2 linked taxes and incentives to drive XEV adoption.
The translation of such policy initiatives is captured in the numbers put out by BNEF. Hybrids are expected to account for about 20 percent of vehicles in ASEAN by 2030 compared to only 5 percent of EVs (BEVs). The numbers for Europe, the US and China also reveal a significant hybrid share.
XEV GROWTH PROJECTION
Source: BNEF EVO 2021
In sharp contrast, our adoption of XEVs is poor, to say the least. India’s share of XEVs stands at just 0.23 percent compared to 26 percent in Europe, 11.6 percent in China, 9 percent in the US and 1.4 percent in ASEAN.
INDIA - GREEN MOBILITY TRACK
EV/Hybrid Share (%)
LET THE CONSUMER DECIDE
Policymakers can take the horse to the water, but they can’t make it drink. Finally, the consumer has to decide what they wish to buy. Of course, the Government can mandate any action, but that’s hardly democratic. The best way for policymakers to propel action is by providing a level playing field for all players and technologies to compete and vie for that share of the consumers’ pocket. If taxes and incentives are linked to emissions, the consumer will decide her or his green-economic equation and opt for the most aligned option.
I for one, will be happy to jump on the hybrid wagon if made affordable. Given my leaning to hit the road on a long stretch, the pure EV as it is built today isn’t even an option, despite my urge to go green.
(Edited by : Jomy Jos Pullokaran)
First Published: IST