NEWS  Speaking on the increase in petrol and diesel prices, Prime Minister Narendra Modi recently said the middle class would not have been burdened if the previous governments had focused on reducing India’s energy import dependence. He also emphasised the need for clean sources of energy. 

CONTEXT  It is time for India to adopt stringent fuel efficiency standards and a zero emissions vehicle programme.

STEPS TAKEN BY PREVIOUS GOVERNMENT IN THIS DIRECTION 

• Formulation of  fuel efficiency standards for passenger vehicles which aimed to reduce fuel consumption by the vehicles while also ensuring lesser pollution.
• The Constitution of the National Electric Mobility Mission Plan (NEMMP) which aims to promote sales of electric and hybrid vehicles in India, thus reducing liquid fuel consumption in the country from the automobile sector.

ISSUES WITH THE STEPS TAKEN  

• While well intended, both these actions fell short in terms of ambition. 
• India’s 2022 fuel efficiency standards for passenger cars are nearly 20% less stringent than the European Union’s standards. The NEMMP primarily focused on hybrid electric vehicles, and most of the incentives under the NEMMP went towards subsidising mild hybrids instead of electric vehicles. As a result manufacturers are rushing to deploy electric passenger cars in Europe while largely ignoring the Indian market.

INITIATIVES BY PRESENT GOVERNMENT 

• Heavy Duty vehicles, which consume nearly 60% of the diesel used in the country, are now subject to fuel efficiency standards. 
• The share of bioethanol in petrol has risen to nearly 8% by volume under the 2018 National Policy on Biofuels. 
• The government has encouraged multiple fuel pathways in the transport sector including natural gas. Also, it has recognised the urgency to undergo transition to electric vehicles. 
• The Faster Adoption and Manufacturing of Electric Vehicles (FAME­) scheme which now focuses largely on electric vehicles. 
• The government has also provided several additional fiscal and non fiscal incentives to encourage a transition to electric vehicles.

WHAT ELSE NEEDS TO BE DONE?

1. The government should formulate a zero emissions vehicle (ZEV) programme that would require vehicle manufacturers to produce a certain number of electric vehicles. 

• A ZEV programme would require all manufacturers to start producing electric vehicles across all market segments, instead of adhering to wait and watch attitude.
• Such programmes are already in effect in China, certain States in the U.S., British Columbia in Canada, and South Korea. 

1. The government should also strengthen fuel efficiency requirements for new passenger cars and commercial vehicles. 

• Currently two wheelers, which consume nearly two third of the petrol used in India, are not subject to any fuel efficiency standards. 
• A recent analysis by the International Council on Clean Transportation (ICCT) suggests that a standard requiring 50% reduction in fuel consumption by new two wheelers by 2030 will not only lead to internal combustion engine (ICE) efficiency improvements, but also ensure that nearly 60% of all new two wheelers sold in India are electric driven. 
• Similar opportunities exist on the passenger vehicle and heavy duty commercial vehicle fronts.

UNDERTAKING COMPLEMENTARY POLICIES

• The FAME scheme focuses on two and three wheelers, taxis, and buses. It should be extended not only to all passenger cars and commercial vehicles but also to agricultural tractors. 
• Extending fiscal incentives to all kinds of vehicles and stepping up investments in charging infrastructure are essential complementary policies. 
• By next year, the GST rates for all passenger vehicles could be made proportional to their fuel efficiency level, instead of the present system that relies on vehicle length and engine size.

As the economy recovers from the pandemic, the demand for petroleum products will rise, as will prices. But the government can save money for the consumer while enhancing long term energy security by wielding the regulatory tools at its disposal.

Reference:

1. https://www.thehindu.com/opinion/op-ed/being-petroleum-independent/article33916640.ece