India faces a major paradox today. While a robust transport sector fuels a growing economy and heralds the economic growth of any region, in India, it also leaves an unsustainable carbon footprint on cities, severely impacting the health and well-being of citizens. It is a fact that the transport sector is the second largest contributor to carbon dioxide. In addition to the health costs of pollution, fossil fuel dependency of the sector continues to burden the exchequer.
Over the next 20 years India’s energy intensity and fuel dependency is expected to rise. According to IEA, India’s oil demand is to rise the fastest — by 6 million barrels per day to 9.8 mb/d in 2040. It has also projected that oil production will fall behind demand, pushing oil import dependence above 90 per cent by 2040. Meanwhile, projections are that the transport sector, which will add more than 250 million passenger cars, 185 million two- and three-wheelers, and 30 million trucks and vans to the vehicle stock by 2040, will contribute to two-thirds of the rise in India’s oil demand.
Pushing the policy
It is against this backdrop of India’s rapidly growing fossil fuel dependence and rising demand of the transport sector that Central and State governments are actively looking at policies for the transport sector that aim both to reduce the carbon footprint of the sector, while meeting the nation’s transport demand.
Policymakers have clearly stated that India has to make a distinct shift towards sustainable mobility, which includes rapid adoption and scaling of alternative fuels, including electric, renewables and natural gas. To their credit the National Electric Mobility Mission Plan 2020 to promote the use of electricity in road transportation to support a target of support a target of level of 6 to 7 million hybrid and electric vehicles by 2020 is in place.
While the thrust on e-mobility is welcome, current policies have not given similar policy support to alternative fuels, in particular the high potential of biofuels as a promising vehicular fuel. This is a missed opportunity which requires course correction. Relying on e-mobility alone will not accomplish our ambition to create a sustainable and green transport on a pan-India basis. This is already evidenced by the fact that e-adoption has not been as rapid as expected.
The evidence so far suggests that market uptake of pure electric vehicles has been largely confined to scooters. We have not seen a rapid rollout of electric buses and cars. Even if there is rapid adoption of electric cars, the problem of congestion is still facing us because private vehicle growth is not the desired direction. We need a shift to public transport, notably buses, which are space and cost-efficient. Biofuel-run buses — private and public — present an unprecedented solution.
Unfortunately, successful pilots of biofuel-run large transport such as buses have not yet received national policy support. Take, for instance, a pilot programme that operates biofuelled buses in Nagpur. There, the city administration has worked with a manufacturer of biofuel buses to roll out green fuel buses that not only solve the green transport problem but also a waste problem. The fuel which is used in these buses is generated from local waste, in effect converting local waste into local fuel for local transport.
Yet, any rapid adoption and scale requires government support to all stakeholders in the vehicular biofuel supply chain, including, manufacturers of biofuel engines, suppliers of biofuels and of course fuelling infrastructure. Ironically, there have been no fiscal incentives to encourage biofuel-based mass transport — buses which can run on biofuel now attract 28 per cent GST plus 15 per cent cess. This would place renewable fuel-enabled buses in the same category as luxury vehicles and cigarettes!
India must also look at pioneering developed countries such as Sweden and a developing country such as Brazil which have achieved significant success in rolling out renewable fuel-based mass transport. Similarly, we have to scale models that promote ideas based on local waste, local fuel and local transport.
There is potential
India has the potential to achieve that. Sewage treatment plants are a gold mine for vehicular fuel and currently generate around 70 billion litres of waste-water every day. This is expected to double in the next 15 years according to the McKinsey Global Institute. By building biogas generation and upgrading facilities at the STP sites, the output can possibly substitute 350 million litres of diesel, 2.3 GwH of natural gas-fired power, and over 8 million LPG cylinders of 14.2 kg capacity. Such projects need urgent attention and fiscal support from Central and State governments.
As the GST Council and policymakers review their goals for 2018, it is a good time to urgently review and align policy intent with policy tools to enable achieving the stated objectives of building a sustainable transport sector with varied clean fuel solutions for all vehicles — from large buses to scooters. E-mobility thrust is welcome, but it is not a panacea to issues facing the transport sector. In fact, without a holistic approach which includes and not excludes the full potential of biofuels as vehicle fuel, we will not be able to achieve our dream of creating an environmentally and economically sustainable transport sector.