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Electric Vehicle Narrative May Derail Clean Air Initiatives in Coming Decade

Added: (Thu Nov 23 2017)

Pressbox (Press Release) - The present momentum on clean air initiatives in the country may very well be heading towards a mess with the narrative around electric vehicles. City Gas Distribution (CGD) companies, engaged in CNG distribution are becoming increasingly skeptical for any further investments into the sector. It takes long to recover the investments they make in covering a new city.
However, the same narrative creates an opportunity for Auto LPG, to play the role of a key bridging fuel, particularly for the next two decades. Payback periods for Auto LPG stations range between 3-5 years and provide opportunity for expansion of this clean fuel almost immediately.

The government has already announced its intention to allow only electric vehicles to be sold in the country from 2030. Since then there has been a considerable discussion among all stakeholders and a scenario seems to be fast emerging is that investments in fuel distribution which have longer gestation periods may not be able make attractive returns given the fact that they have a limited window available to them for making adequate returns.
“It mostly takes about 3-5 years to recover investments on an Auto LPG retail outlet, for a city which has committed itself to run on Auto LPG, mostly because of a firm government mandate and push. It will take time for Electric vehicles to get some traction as government figures out the creation of complete eco system for EV rollout. It is going to take at least 10-15 years for a reasonable electric eco system to be in place and the government cannot just continue to press the snooze button until that time. Immediate measures to provide relief through firm air quality measures are required. Auto LPG provides one such option and is a low hanging fruit.”

“The EV narrative is great for long term, but short and long-term fixes are required almost immediately. CNG network expansion will certainly be impacted. There is a key bridging role for Auto LPG to play, particularly for the next two decades.” said Mr. Suyash Gupta, Director General, Indian Auto LPG Coalition (IAC).

According to estimates by experts, it takes Rs 250-400 crore of investment to roll out CNG distribution ability in a new city, and that too which is connected to a CNG pipeline infrastructure. The payback time in such cases is 7-8 years.
Auto LPG marketers can start operations quickly with very little infrastructural requirements as the dispensing can be done from storage tanks at the pump itself. It does not ideally require pipelines to be connected to any central pumping station.

“This also presents a huge opportunity to vehicle OEMs who can quickly launch models that run on Auto LPG until electric technology and eco systems develop. It requires little adaptation for OEMs to convert their vehicles from Petrol to LPG run models. Several OEMs had Auto LPG models in their portfolio in the past and there is a good rate of conversion into LPG already underway. About 10,000-12,000 vehicles are being converted into LPG through after-market every month in the country,” said Mr Gupta.
It is imperative for government to move quickly as this is no less than an SOS. Pollution took about 25 lakh lives in India in 2015, most in the world. There are many more that are getting irreversible respiratory disorders and asthma. India has 13 of the 20 most polluted cities in the world, putting a huge disease burden on the population. The nation can ill-afford to snooze on clean air initiatives underway.

There are about 23 lakh vehicles running on Auto LPG in India and the number is expected to touch 30 lacs in five years at the current rate. Any alternate fuel needs to be first affordable and then have an ease of use.
The use of LPG as an automotive fuel was legalized in India with effect from April 24, 2000 and since then there has been no looking back. More than 500 cities have been covered by Auto LPG with more than 1100 stations since then. Globally, Auto LPG is the third most commonly used automotive fuel after Petrol and Diesel. Over 26 million vehicles across 70 countries use Auto LPG to help clean their urban environment. Globally, seven of the ten largest car manufacturers produce LPG powered cars.

About IAC:
Indian Auto LPG Coalition (IAC) is the nodal body for the promotion of Auto LPG in India. Members of the Coalition include the Oil Sector PSUs, Private Auto LPG marketers, Kit Suppliers and Equipment manufacturers. The Coalition works very closely with the World LPG Association, Society of Indian Automobile Manufacturers and Automotive Research Association of India.
IAC is also a member of “Central Motor Vehicle Rules - Technical Standing Committee” (CMVR-TSC) & “Standing Committee on Emission Legislation” (SCOE), TED26 (Bureau of Indian Standards), Government of India.

Submitted by:Ruchika Wadhwa
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