India's transition to alternative fuels is critical not only for lowering greenhouse gas emissions and becoming carbon neutral, but also for improving energy security and reducing reliance on fossil fuels
India is making significant progress towards a more sustainable future by adopting alternative fuels in the transportation sector. Deloitte's recent report, "Fuels of the Future: Exploring Alternative Fuel Options for Transportation," emphasises the country's accelerating transition to cleaner energy solutions.
Electric vehicles are emerging as a formidable competitor in India's alternative fuels landscape. Deloitte's analysis predicts a significant increase in EV penetration in the medium term, driven by supportive government policies such as the FAME III scheme and lower production costs. While EVs are expected to remain dominant until 2040-2045, their popularity may decline as greener fuel options such as green hydrogen become more widespread and technologically advanced.
Although still in its early stages, domestic green hydrogen production is expected to increase significantly. According to the Deloitte report, green hydrogen, particularly as a combustible fuel, has the potential to outperform EVs over time. Government support and technological advancements will be critical to facilitating this transition.
Natural gas and liquefied petroleum gas (LPG) adoption is expected to rise rapidly in the coming years, peaking in 2040. However, their popularity is expected to decline within a decade due to the rise of less import-dependent alternatives with better sustainability ratings.
Biofuels made from renewable resources, such as agricultural waste, are also gaining popularity in India. While facing challenges in supply chain logistics and production costs, biofuels are expected to grow significantly with improved technologies and increased government support.
India's transition to alternative fuels is critical not only for lowering greenhouse gas emissions and becoming carbon neutral, but also for improving energy security and reducing reliance on fossil fuels. Proactive measures by the government, combined with technological advancements and industry collaboration, are paving the way for India's transport sector to become cleaner and more sustainable.
As India approaches its centenary of independence, the adoption of alternative fuels, particularly green hydrogen, will be critical in shaping the country's mobility landscape. OEMs and component manufacturers must adapt to this changing landscape, recognising the unique needs of each vehicle segment and seizing the opportunities provided by alternative fuels.