Author: Rajesh Kaul - Vice President & Business Head – Trucks, Tata Motors
With rapid urbanisation, India is developing a growth trajectory towards sustainable mobility which is cleaner, more efficient and environment-friendly. We are progressing with battery electric vehicles, followed closely by hydrogen cell-based powertrains and other alternative-fuel vehicles. While zero-emission energy sources attain a critical mass, we need an interim solution that solves our purpose of reducing tail-pipe emissions. Natural gas – a ‘transition fuel’, acts as a perfect bridge between the present and the future.
Time to step on the gas
As per the report published in 2022 by Niti Aayog, it is estimated that the number of trucks on our roads could quadruple by 2050. Hence, switching to natural gas-based fuels is vital not only for environmental and human health but for the economic viability of the Commercial Vehicle (CV) industry itself. From India’s perspective, emission reduction, import bill reduction and energy security are the top drivers in balancing the country’s energy basket. Towards this, the Government is encouraging the use of CNG over the conventional fuels, with around 50% of CNG sourcing explored within the country. Switching to natural gas-based fuels also has economic advantages. For one, it has the potential to reduce India’s massive crude oil import bill.
The environmental benefit of natural gas-based fuels, such as CNG and LNG, are plenty. Natural gases are environmentally friendlier than conventional fossil fuels such as diesel. Various studies have shown that tailpipe Green House Gas emissions from CNG-powered vehicles are around 20% lower than conventional fuel vehicles. For customers, CNG-powered trucks are easier on the pocket with the inherent quality of being more efficient, and lower maintenance costs than diesel vehicles providing a total cost of ownership advantage and hence making a strong case for itself in terms of business viability.
Building the ecosystem
A good news for transporters and consumers is that the country has been investing heavily in its natural gas infrastructure. As per the Government, we should expect more than 17,000 CNG stations up and running across the nation by 2030, which will be beneficial for long-haul transportation. Measures like setting up a national gas grid, building more LNG terminals, and promoting bio-CNG under the SATAT (Sustainable Alternative Towards Affordable Transportation) scheme will enhance access to natural gas in all corners of the country.
Additionally, transporters and consumers are being incentivised to switch to gas-based vehicles with a slew of tax credits, subsidies and grants. Another welcome development is the Government’s approval of the new natural gas pricing mechanism, which has enhanced CNG’s affordability vis-à-vis petrol and diesel.
Shaping the future ahead
As automakers build the technology and infrastructure for battery electric and hydrogen-powered vehicles, it is expected to mature linearly. In the midst, with its many advantages, natural gas is a medium-term solution that buys precious time for the CV sector’s eventual shift to fossil-free fuels.
Taking the lead in adopting transition fuels, Tata Motors has the widest CNG-powered range of CVs across all segments. The company has also re-imagined its entire product portfolio and operations with clear target to achieve Net Zero Emission by 2045. At Auto Expo 2023, Tata Motors showcased multiple green fuel options, which include natural gas, electric and hydrogen, thus leading the charge in sustainable logistics. We expect the new-generation technology in the next decade to heavily rely on low-cost, long life batteries and hydrogen drivetrains, supported by a robust infrastructure and hydrogen refuelling solutions.
The demand for CNG-powered commercial vehicles saw a sharp rise in FY22, due to the increasing differential between CNG and diesel prices, and the increasing availability of fuelling stations, driving the operating economics in favour of CNG vehicles. Fuel prices have the biggest impact on the operating economics of the transporters. While there was an increase in CNG price in the last financial year, in the long term, favourable operating economics and improving availability is expected to drive demand of CNG-powered vehicles and will lower the fuel cost in the future. To achieve the end goal of zero-emission vehicles, the journey to electrification will be through gasification. This change of pace will be dependent on the technology advancement, incentive structure as well as infrastructure development. Towards the end of this decade in the CV industry, natural gas adoption will be at par with diesel adoption, with growing proportion of EVs and Hydrogen based vehicles.
Published: 04 November, 2023 | The Financial Express
