While pushing electric vehicles, the government is also keeping all other alternative fuel options open
The future is electric. That’s the given wisdom in the automobile industry as Elon Musk steers along silken highways into the new era. But the Indian government is taking a multi-pronged approach. It’s convinced there are many smaller roads that might also serve its twin goals of dramatically cutting pollution and the country’s over $100-billion annual oil bill.
For now, let’s say all options are open. On Independence Day, Prime Minister Narendra Modi announced a National Hydrogen Mission. Hydrogen is the dream fuel in the sense it’s the most non-polluting, but nobody’s really cracked the code on storing and using it. The Reliance Group has started work on the ₹60,000-crore Dhirubhai Ambani Green Energy Giga Complex in Jamnagar. One of four plants will be an electrolyser to produce green hydrogen.
Before that, in July, the government announced it was advancing its timetable for introducing E20 ethanol — oil blended with 20 per cent ethanol — from 2030 to 2025. Currently, petrol blended with up to 10 per cent ethanol is sold at the pumps. Many changes, both in vehicles and service stations, will be needed before E20 can come into effect. Discussions with the government are ongoing, the oil and automobile companies say diplomatically when asked about the 2025 target.
If that isn’t enough for the industry to contend with, Transport Minister Nitin Gadkari has shaken the sector by declaring he would soon mandate that in future all vehicles be able to run on what’s called flex-fuels. In the Indian context, flex-fuels would have blends of 20-85 per cent ethanol. Gadkari has a reputation for setting stiff targets and being a ‘doer’ so the auto industry is nervously awaiting his next command.
Introducing all these changes will be complex and costly. Once E20 is introduced, what will happen to older vehicles designed for E10 or less? Then, there’s the question of whether E10 and E20 will have to be stored separately and whether they’ll need separate pumps.
Also, remember ethanol’s made from sugarcane which immediately gets into deeply political terrain as many senior politicians hold sugar mill stakes in Maharashtra and Uttar Pradesh. Ethanol is basically renewable biomass made from sugarcane and other crops with heavy starch content. Modi recently ordered ethanol should be made from all biomass products like rice husk and maize to increase availability. If flex-fuel vehicles come onto the roads, it’s likely States with plentiful sugarcane and other biomass crops will have a higher ethanol content than other States where it’s less plentiful.
Gadkari and Modi aren’t setting wild targets with no realistic base: Brazil quickly achieved more ambitious targets and has around 27 million flex-fuel vehicles running. The Brazilians also found flexibility essential so the mix could be adjusted — if oil prices rose, more ethanol could be added, and vice-versa.
There are also other roads to be travelled. Look at the country’s largest automaker, Maruti-Suzuki, which successfully betted on CNG. The company began making CNG vehicles in the 2016-17 financial year and in 2020-21 sold 157,954 vehicles — more than 10 per cent of its total production. It helps that these vehicles can be serviced at Maruti’s 4,000 nationwide service centres.
CNG is also likely to get a boost because the government has ambitious plans for more CNG stations. There are currently 2,800 CNG stations and 700 have been added even though work slowed because of the pandemic. The government is talking about adding 10,000 CNG stations in the next 7-8 years.
There are other options that all have their benefits. Look at auto LPG which has strong advantages over CNG. There are already 1,400 filling stations spread out over 500 cities and towns. There’s been a particularly strong push to auto LPG particularly in south India, Gujarat and Maharashtra. Around two lakh vehicles on Bengaluru roads run on auto LPG and there are 1.5 lakh auto LPG vehicles in Hyderabad, points out Suyash Gupta, director-general, India Auto LPG Coalition.
The Indian Auto LPG Coalition notes auto-gas is 50 per cent cheaper than petrol or diesel and emits about half the CO2, total hydrocarbons and non-methane hydrocarbons. Auto LPG is extremely popular in Turkey and even South Korea which uses four million tonnes of auto LPG annually. India uses only 0.4 million tonnes. The Indian Auto LPG Coalition also points out that in Delhi CNG is not taxed while auto LPG attracts 18 per cent GST.
While ethanol is the hot favourite amongst biofuels, there’s also methanol produced from coalbed methane. Methanol’s advantage is that India has plenty of coal so it would be inexpensive to produce. However, pilot tests are still on, and the wrinkles haven’t been ironed out.
The fact is that for the auto industry all these proposed changes are turning into a nightmare. It made the tough change to BS-VI fuels only in April 2020. In the near future it must add onboard diagnostics to measure emissions. Then it must get ready for the welter of changes the government wants.
Where does electric, the fuel that’s far out in front, fit in with all these other potential fuels? One view is though electric adoption seems to be speeding up after the pandemic, there’s still a long way to travel. Try to imagine for a moment, the scenario if all the four-wheelers in a neighbourhood with on-street parking need to be recharged every night.
Firstly, they’d all need charging stations. More seriously, imagine the jump in electricity consumption as owners plug in their cars for overnight charging. Analysts calculate that if every American started driving electric passenger vehicles, the US could end up using 25 per cent more electricity. To meet demand, utilities would have to build more plants and upgrade transmission networks. For now, in India, that electricity would be thermal power which means coal consumption would shoot upwards as would pollution. Can we switch rapidly to electric on a massive scale?
Alternatively, there’s also hydrogen, the cleanest fuel of all. If Mukesh Ambani or anyone else figures out a way to economically run our vehicles on it, then it could vanquish all the competitors. Till then, the government’s decided experimentation is the name of the game when it comes to alternative fuels. Hang on for the ride.