The Energy Transition Advisory Committee (“Committee”) of the Ministry of Petroleum & Natural Gas has recently released a report titled “the green shift” (“Report”). The Report has been published keeping in view the central government's endeavor to reach Net Zero emissions by the year 2070 making India a key player in the global fight against climate change.

The Report focuses on transitioning towards low carbon fuel in India’s oil and gas sector and does a detailed analysis of the current status of India’s energy sector such as the aviation, shipping, surface and road transport industry. It also recommends several reforms and policy changes to the central government in respect of the energy sector, with the aim to align the growth of the energy sector with the government’s existing stand of achieving Net Zero emissions by 2070.

The instant update focuses on the key recommendations made by the Committee with respect to the surface transport industry as well as the aviation industry.

Surface transport industry

1. The surface transport sector includes light motor vehicles, such as two, three and four wheelers as well as heavy duty vehicles comprising trucks and buses. The industry has been rapidly expanding globally and accounts for nearly a quarter of energy consumption in the world. The Report states that in 2020, the global transport industry was responsible for approximately 7.3 billion metric tons of carbon dioxide emissions from fuel combustion. Transport also depends on oil more than any other sector, therefore 90% of the energy use for the surface transport sector comes from petroleum products.
2. There is therefore a need to reduce the high dependence on fossil fuels in order to achieve an overall Net Zero greenhouse gas emissions path. The Report notes that electrification of private transport is indicative of a disruptive transition from fossil fuels to electric vehicles and the same needs to be closely linked to renewable energy expansion and growth in the charging infrastructure.
3. The Report also acknowledges that electrification using currently available technologies is not a scalable option for heavy-duty transport, shipping, and aviation and therefore in the short term, there should be a focus on increased use of sustainable biofuels and clean hydrogen in sectors which are not mature for electrification.

Recommendations:

1. The Committee has recommended the following important changes for the central government to adopt for effectively achieving its goal to make India reach Net Zero emissions:
2. For two and three wheeler vehicles, the Committee has recommended building up of charging networks as well as promoting battery swapping. As a short term measure, the Committee has recommended to devise a policy for two and three wheelers which are operating on internal combustion engines (“ICE”) to use ethanol-blended fuel.
3. For four wheeler vehicles, the Committee has suggested a shift towards electric vehicles and ethanol blended petrol. The Committee has also suggested a ban of diesel-powered four wheelers by 2027 in all cities having a million plus population.
4. For city buses, the Committee has recommended a transition from diesel buses to clean fuel (such as ethanol blended petrol, CNG, LNG), and for expediting adoption of all-electric buses with respect to government buses. Similarly, for inter city buses as well as cargo, the Committee has recommended transition to all electric buses with CNG/ LNG as transition fuels.
5. Finally, the Committee has suggested that all forms of surface transport ought to be transitioned to electric vehicles and an ecosystem for electric vehicle based mobility should be promoted.

Aviation industry

1. As the effect of the COVID 19 pandemic is diminishing, demand for air travel is soon to increase exponentially. Resultantly, increased demand for air travel is bound to increase greenhouse gas emissions across the world.
2. The Report suggests that the aviation industry will produce about 3 percent of total global greenhouse gas emissions. Globally, the aviation industry produced 915 million metric tonnes of carbon dioxide in 2019.
3. The Report also identifies short term as well as long term alternatives for the aviation industry to transition away from jet fuel which is responsible for high greenhouse gas emissions. While the long term solution for the aviation industry seems to be an overhaul in the technology; adaptation of new propulsion systems such as those in electric hybrid aircrafts as well as use of hydrogen, the short term solution is to switch towards sustainable aviation fuel (“SAF”) which has reduced emissions compared to conventional jet fuel

Recommendations:

1. The Committee has suggested adoption for SAF along with hydro-processed esters and fatty acids and alcohol to jet fuels and ethanol blending in the short and medium term.
2. Focus on R&D for new indigenous feedstock and processing technologies for efficiency enhancement of SAF value chain.

Conclusion:

The Report therefore serves as a roadmap for the central government for promulgating any future policies to achieve its overall goal of becoming a nation with Net Zero emission in the ensuing years. Going ahead, any policy to be made by the central government may adhere to the detailed recommendations made in the Report.

Please find a copy of the report, here.

This update has been contributed by Udit Mendiratta (Partner), Niharika Sharma (Senior Associate) and Shivkrit Rai (Associate).

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