The transportation sector is a large consumer of energy and contributes significantly to greenhouse gas emissions. It is, therefore, important to take measures to decarbonise the sector and explore alternatives to fossil fuel for vehicles. To this end, the Indian government has been taking significant steps such as the introduction of incentives and regulations to promote the uptake of EVs. Further, efforts are being made to encourage the adoption of green hydrogen and ethanol. At the “INSIGHT 2022: International Conference on Sustainable and Innovative Finance for Green and Healthy Transportation” organised by WRI India and Convergence Energy Services Limited, Nitin Jairam Gadkari, Union Minister for Road Transport and Highways, talked about key government initiatives to decarbonise the transport sector and the way forward for green mobility. He also gave suggestions to make public transport cleaner and more cost effective. Edited excerpts…
The transport sector accounts for 13.5 per cent of India’s carbon emissions, with road transport accounting for 90 per cent. We have 290 million registered vehicles on the road and the automobile industry in India is worth about Rs 7.8 trillion. The growth rate of vehicles in India is around 10 per cent. Furthermore, automobile exports are worth about Rs 3.5 trillion. We are trying to improve the growth rate of the automobile industry in India to around Rs 15 trillion. This industry is generating high employment by giving job opportunities to over 4 million people. Also, the industry provides high revenues through GST to both the central and state governments.
However, the issues of air pollution and crude oil imports continue to impact the transport sector in India. We need to discourage the use of personal vehicles amongst the population and encourage them to use public transportation. Further, transitioning to electricity is the best solution for making our public transportation system efficient. Not only will it help in reducing pollution, but it will also lower our import bills.
Today, the state of public transport is not good in India. The reason is high losses, amounting to over Rs 200 billion, accrued by the public transport state corporation units. One of the larger issues contributing to these losses is the use of diesel in public buses. Our public transport is looked upon as economically non-viable because of these losses.
In Mumbai, we launched a double-decker electric bus. It seats 65 passengers and has a range of 250 km on a single charge. The cost of running a diesel double-decker bus is Rs 100 per km, whereas the rate for an electric double-decker bus is Rs 56.40 per km. So, 50 per cent savings can be generated by switching to electric buses. I am confident that we can also reduce the cost of the tickets by 25 per cent, which will provide a significant relief to the people. Also, deploying rooftop solar systems on bus depots can contribute to green power generation. Thus, by adopting new technologies and by saving on fuel, our costs will be lower and we will be able to improvise on the functioning of our public transportation.
I would also like to recommend a case study of trolley buses in European countries. Since lithium-ion batteries are costly, the life cycle cost of these batteries was quite high earlier at around $150 per kWh. But now, the cost is $130 per kWh and within one and a half years, it is expected to be around $100 per kWh, which will be equal to the cost of petrol vehicles. When the notion of EV adoption in India started, people were very apprehensive about it. However, today, the situation is such that there are year-long waiting lists for getting electric four-wheelers. There are about 250 manufacturers that are making two-wheeler EVs and electric buses.
We should have a target of deploying 500,000 electric buses instead of just 50,000, as we have great potential available in the country. I congratulate the team at Convergence Energy Services Limited (CESL) for their tender of 5,450 electric buses, is the largest EV bus order in the world, with very competitive rates. As per the study conducted in Mumbai, the pricing for a diesel bus is coming out to be around Rs 215 per km. However, after the tender, which was received by CESL, the cost is Rs 39 per km for non-AC buses and Rs 41 per km for AC buses. This is a significant achievement.
It has been seen that there is sufficient economic viability and the internal rate of return is good in the electric mobility space. If no one is ready to finance then one can approach the auto-finance companies. Alternatively, financing can be done by contacting the operators and the city bus service. Money is not the key issue here as different stakeholders from insurance funds, pension funds and many more are eager to invest in the sector. Hence, ample economic viability is present for transformation in the transport sector.
The cost of running diesel vehicles is about Rs 115 per km. Meanwhile, the cost of running EVs is around Rs 40 per km. Thus, I believe that we do not need any government investment for this purpose. By having a transparent policy, we can attract good investments. Work on battery chemistry is also progressing. We have been developing different kinds of batteries. Recently, Indian Oil Corporation Limited has engaged in the development of aluminium air technology for batteries. We are also about to launch a flex engine car made by Toyota, which runs 100 per cent on bioethanol. Just like the Camry model, in place of petrol there will be 100 per cent bioethanol, which is going to generate 40 per cent of electricity. So today, there are a lot of options that are available in the market. Going forward, green hydrogen will be an important alternative. It is the future of mobility.
In Panipat, Indian Oil Corporation has started a project to make 100,000 litres of ethanol and 150 tonnes of bio-bitumen from rice straw. At present, there are massive concerns around the burning of rice straw as it leads to significant pollution. We have been working on a project dealing with the conversion of 5 tonnes of rice straw into 1 tonne of bio CNG and bio-LPG. In the next month, we are going to launch an electric truck. Also, an electric JCB project is on its way which will use 50 per cent bio CNG and an order has been placed for 1,000 such JCBs from Russia. Going forward, it is also important to electrify the fuel in the construction operating machines.
We must phase out petrol and diesel because they are not only an economic burden for the country, but also a significant source of pollution. With alternative means of transport being economically viable, we can make use of policies for import substitutes and cost effectiveness. We can start services from Delhi to Jaipur of electric double-decker air-conditioned buses with all types of facilities. There can be different routes such as Delhi to Shimla, Delhi to Chandigarh, Delhi to Lucknow and Delhi to Kanpur. We also want to make an e-road from Delhi to Jaipur.
We can significantly help in reducing the pollution by switching to alternative fuels such as electricity, ethanol, methanol, biodiesel, bio CNG and green hydrogen. Pollution is a big problem, but at the same time it is important to address the economic standpoints to make this switch. We can reduce the import bill substantially, which currently stands at about Rs 16 trillion. This is a big challenge. The diversification of agriculture leading to the involvement of the energy and power sector is very important for the country going forward.
I feel that there is a lot of potential for transforming the transport sector. This is a time for the country to research more new technologies and innovations in this field.