Synopsis: India first needs to manage the demand for petroleum Independent products, before expanding and diversifying the energy supply.
How government can reduce dependence on petroleum?
There are many things that the government can and should do to reduce dependence on petroleum.
- Firstly, the government should introduce a zero-emissions vehicle (ZEV) programme. It requires all vehicle manufacturers to produce a definite number of electric vehicles. For example, ZEV programmes are present in China, South Korea and Canada etc.
- Secondly, the government should strengthen fuel efficiency requirements for new passenger cars and commercial vehicles. Two-wheelers are not subject to any fuel efficiency standards even when they consume two-third of the petrol used in India.
- A target of 50% reduction in fuel consumption by 2-wheelers may result in innovations, such as increasing efficiency of internal combustion engine (ICE) efficiency and increase in electric driven two-wheelers.
- Thirdly, similar steps should be applied to the passenger vehicle and heavy-duty commercial vehicle. Consumers who switch to electric vehicles will save even more money as electricity is cheaper compared to petrol and diesel.
What are the steps taken by the government?
- The National Electric Mobility Mission Plan (NEMMP) was launched. However, The NEMMP mainly focused on hybrid electric vehicles and most incentives went towards subsidizing mild hybrids instead of electric vehicles.
- Heavy-duty vehicles, which consume nearly 60% diesel, are now subject to fuel efficiency standards.
- The Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme now focuses largely on electric vehicles.
- The FAME scheme focuses on two- and three-wheelers, taxis, and buses. It should be extended to all passenger cars, commercial vehicles and to agricultural tractors.
- Introducing complementary policies like stepping up investments in charging infrastructure are essential. The GST rates for all passenger vehicles could be made proportional to their fuel efficiency level.
- Adopting strict fuel efficiency standards and a ZEV programme by 2024 can result in India’s petroleum demand peaking by 2030. By that, the government can save money for the consumer while enhancing long-term energy security by wielding the regulatory tools at its disposal.
- Thus, It is time for India to adopt stringent fuel efficiency standards and a zero-emissions vehicle programme.