DISSERTATION

ON

EMERGENCE OF DEPENDENCY ON
GREEN FUEL

DISSERTATION
Submitted in partial fulfilment of the requirement of
B.Com. (Hons.)

by

Nomaan Mistry
Roll no. 18BCO120

Under the guidance of

Supervisor: Dr. Sanjay Kumar Pradhan
Tejas Dave Sir

PANDIT DEENDAYAL ENERGY UNIVERSITY,

GANDHINAGAR
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(BLANK)

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 APPROVAL SHEET

This dissertation entitled EMERGENCE OF DEPENDENCY ON GREEN FUEL

by NUMAAN MISTRY is recommended for the degree of
Bachelor of Commerce (Hons.)

Examiners

Supervisors

Chairman

Date: 14THMAY 2022

Place: Gandhinagar

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 DECLARATION

I NUMAAN NAZMUDDIN MISTRY hereby declare that this written

submission represents myideas in my own words and where others’ idea
or words have been included, I have adequately citedand referenced the
original sources. I also declare that I have adhered to all principles of
academichonestly and integrity and have not misrepresented or
fabricated or falsified any idea / data / fact /source in my submission. I
understand that any violation of the above will be cause for
disciplinaryaction by the PANDIT DEENDAYAL ENERGYUNIVERSITY and
can also evoke penal actionfrom the sources which havethus not been
properly cited or from whim proper permission has notbeen taken when
needed.

SIGNATURE

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 ACKNOWLEDGEMENT
 

This project has been made possible with the help and support from
everyone, including my parents, teachers, friends, and in essence, all
sentient beings. I would also like to express my gratitude to my faculty
guide, Tejasdave sir and Dr Sanjay Pradhan Sir, for continued guidance
and immense support as well as invaluableencouragement. They offered
metheir Dr Tejas Dave sir invaluable guidance suggested ideas-related to
about the the feasibility,organization, and theme of the project.I convey
my sincere thanks to all those who spared their precious time for me and
givingme a great opportunity to work on the project and solve my
problems, doubts, queries,which I faced during my project.Finally, I
sincerely thank my parents, family, and friends, who provided me with
the adviceandsupport. The product ofthis project would not be possible
without all of them.

Numaan Mistry

18BCO120-
BCOM(HONS.) 2018-2022

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 TABLE OF CONTENTS

1. Declaration
2. Acknowledgement
3. Aim And Objective
4. CHAPTER I- Introduction
4.1 Current situation of Fossil Fuels
5.CHAPTER II - Current scenario of crude oil and Impact on the Auto
Industry
5.1 Solution in favor of such problems
6. CHAPTER III - Introduction to Green Fuel
6.1 Types of Green Fuel
6.2 About Natural Gas
6.3 Advantages of Green fuel
7. CHAPTER IV- Contribution of Green Fuel for Energy basket
8. CHAPTER V - Implementation of Green Fuel in International market
9. CHAPTER VI - Implementation of Green Fuel in Indian market
10. CHAPTER VII - Government plansfor the future of Green India
11. CHAPTER VIII - Findings and Interpretation
12. CHAPTER IX - Conclusion
13.CHAPTER X - References

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 AIM AND OBJECTIVE OF THIS STUDY

The purpose to conduct this study is to bring out and present the current
scenario of the Fossil fuel industry as a whole and to point out the
changes needed in order to maintain the industries depending on fossil
fuels and to structurally plan a way for such industries future. In this
Dissertation, we will solely focus on the Automobile industry and the
impact of slowly focusing on alternative options apart from petrol or
diesel by finding a suitable, adaptable solutions to the problems to be
face by the Automobile industry due to fossil fuels.

The first Motto of this dissertation was “WHAT WILL THE WORLD RUN ON
AFTER FOSSIL FUELS?” but since the sector selected for this study would
be Automobiles, the new motto of this study is changed to “WHAT WILL
THE AUTOMOBILE INDUSTRY RUN ON AFTER FOSSIL FUELS?”.
This motto sums up the crux of the study and also gives us an idea of the
aim of this research.

In this study we will discuss on the factors such as – Current scenario of

fossil fuels in some other countries, Options to be considered other than
fossil fuel, Demand, and adaptability of green fuel in near future, Indian
government plans on green fuel, success or failure of green fuels in real
world, Environmental benefits of green fuels.

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 CHAPTER- I

INTRODUCTION

The fossil-fuel industry is slowly dying. It’s not just because of the
transitory effect of the coronavirus, which has temporarily cut demand;
it’s secular, as the economists say. Just last week,
Bloomberg reported that even natural-gas utilities are feeling the scorn of
investors, who want to put their money in renewable electricity. The key
question, of course, is how slowly the industry is dying—we badly need to
speed up the current trajectory to catch up with the physics of climate
change.

But it’s not too early to start asking what the industry will leave behind,
beyond a badly overheated planet. And one answer, apparently, is a huge
number of holes in the ground, not to mention a huge number of holes in
government budgets. It turns out that, in jurisdictions around the planet,
oil and gas companies have been failing to reclaim, or even plug, old wells
that are no longer producing in commercial quantities. These unfunded
liabilities are truly enormous.Most analysts think that the world's
demandfor energy will keep growing soon. But they also believe that as
time passes, renewable sources of energy -- hydroelectric, biomass and
perhaps nuclear energy, but above all wind and solar -- will replace fossil
fuels, reducing carbon emissions.

On the other hand, this ever-increasing demand for fossil fuel is a debacle
on the ever-increasing global warming problems faced all over the world
and is causing various life-threatening constant changes in the
environment which according to many environmentalists, will cause
chaos in thelong run to the human surroundings.

This and sudden fluctuations in crude prices on international level has

demanded more dependency on green fuels for not only in the
automobile industry but also for various other industries usage also
wherein diesel or petrol were used to run things are now making
progression towards usage of Liquified Natural Gas (LNG). This and many

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other reforms are introduced by the Indian government to become lesser
and lesser dependent on fossil fuel in the long run.

Let us consider an economic standpoint on the sudden and

unmanageable changes in prices of crude oils in the international
market.Because the world remains so reliant on crude oil, its price is
heavily dependent on the pace of economic growth, which affects
demand prospects.This relationship is a two-way street, because our
dependence on petroleum products in transportation, chemicals and
manufacturing, means changes in the price of oil can also affect the pace
of economic growth.

For example, in the early months of 2022, crude oil prices at seven-year
highs above $90 per barrel were frequently described as an inflationary
threat to growth.That's in contrast with crude's plunge in the spring of
2020 in response to the COVID-19 pandemic.

The current situation in India is also really fragile, factors such as

thefallout of the Russia-Ukraine conflict, crude oil price has touched 130
dollars a barrel. Now it is feared to go past 150 dollars within a few
weeks, or even 200, depending on how the conflict in Europe progresses.
According to a report by Kotak Institutional Equities, a likely drop in crude
oil exports from Russia could keep oil prices elevated for a protracted
period. At an average crude oil price of 120 dollars a barrel, the report
estimates an additional burden of 70 billion dollars on the Indian
economy in FY23 above the FY22 level. This additional burden would be
1.9 per cent of GDP. To soften the impact on consumers, the government
might have to further reduce excise duty on diesel and petrol. Assuming a
20-rupee reduction per litre, there could be a decline of 100 billion dollars
in excise revenues. According to the report, an impact of 22 billion dollars
might be directly borne by Indian households.
Companies will face an impact of about 28 billion dollars. The increase in
commodity prices will have a direct impact on the economy as India
imports 85 per cent of its oil requirements. Based on the supply shock,
real economic growth could be lower than predicted. The targeted fiscal
deficit as a percentage of GDP might be difficult to manage, even if
nothing changes in terms of government expenditure. Weakness in
markets may have an impact on the government's receipt. This and many

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other frequent changes brings out negative impact on the oil industry.
India as a country does not have geographical advantage of not
depending on other countries for fossil fuels, This is the biggest limitation
and should be a major boost on to start focusing on creating a Green
automobile industry in India as fast as possible.

As per the above figure, courtesy of Statista.com, We can clearly observe

that the price level of crude oil is steadily increasing and shows a no way
downtrend soon. The over dependency of crude oil in various Industries
has led this situation to showcase itself on a larger scale. Demand of
crude oils is not just limited to the automobile industry but also various
other industries like chemicals, various machinery working on petrol or
diesel require chunk of crude oil. This over dependency is the reason
automobile industry should look for a way out and a cheap, easy to
collect type of fuel. In the coming chapters we will learn about various
types of substitute fuels available in the world and its impact in the
industry thus far.

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 CHAPTER- II

CURRENT SCENARIO OF CRUDE AND IMPACT ON AUTO INDUSTRY

Rising fuel prices will have a negative impact on the automobile industry,
hitting vehicle demand, while also adding to the overall inflationary
pressure, auto industry body SIAM said on Wednesday.The focus has
been shifted from monthly numbers to what is happening in the global
markets. What does crude oil prices going up mean for retail as the cost
for running the vehicles go up. Also, what impact will price of steel and
other commodities going up mean as far as the production in Motown is
concerned.Crude is almost $110 to a barrel now. It was $60 to a barrel in
the beginning of the year and after the war started, it has gone up by 25%
more.Therefore, this is a big negative factor because it will increase the
fuel prices here and it will be inflationary. It will increase the cost of
operations for the transporters and how much they are able to pass on so
that becomes a big uncertain factor as far as the replacement of the fleet
is concerned. Then also, it is inflationary. On the other hand, as of now,
we have not seen much impact in India and the industry continues to do
well. For the commercial vehicle industry, even in February the growth
has been there. It has grown by almost 14-15%, 3.5 times and above and
we are expecting this growth to continue in March as well.

This was the recorded message of vice president of SIAM, Vinod Agrawal.
The current situation of petrol and diesel rates in India have increased
1.5-fold in just a year. In Gujarat, petrol is hovering around 105.60 and
diesel at 99.21, In Mumbai petrol is trading at 120 in April 22. This ever
rising crude price levels limits a common man’stravel as transportation
becomes un manageable. This has impacted the auto industry but not
with a heavy hand. There is a rise in demand of each and every segment
cars post covid. Companies have started launching CNG fitted cars with
every only petrol variant, This not only increases the options for the

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customer but also an affordable fuel variant car becomes an ideal choice
for customers.

Let’s discuss the current situation of Russia-Ukraine conflict which is

directly affecting the crude oil demand and supply in the international
market and consecutively bringing price changes all over the world.Oil
prices are threatening to spiral out of control with an imminent Russian
invasion of Ukraine. For the first time in over seven years, crude oil rates
have penetrated $90/barrel (Rs 6,660) in the fourth week of January and
could comfortably cross the $100 (Rs 7,401) mark if tensions continue to
rise.

One can well imagine what this could mean for India, which imports over
80 percent of its oil. They were beginning to rise in recent times, but this
did not dissuadethe Centre from exploiting the excise duty proceeds from
petrol, diesel, and cooking gas to the maximum extent possible.

i) Crude oil rates have already crossed $90/per barrel (Rs 6,660)
ii) Entry level two-wheeler segment could be worst hit
iii) Crude once touched $150/barrel (Rs 11,101) during the
2008-'09 recession

For the last few months, prices have remained stable due to the assembly
elections. A fuel price hike is a recipe for disaster during the elections and
every political party across India’s vast landscape is more than aware of
this reality. Once the votes are cast, however, the long-awaited hike is
implemented to ensure that the public sector oil companies stay afloat.

Ukraine crisis
Today, we have a situation where crude oil prices could even soar to over
$100/barrel (Rs 7,401) if there is no resolution to the crisis building up in
Ukraine. Russian President Vladimir Putin is in no mood to listen to
reason and wants to declarehis country’s supremacy. The problem is that
the United States has no plans of interfering either, especially in the
environmentof its withdrawal from Afghanistan and leaving it at the
mercy of the Taliban. The pandemic is another reason why the US is in no
mood to get involved in conflicts around the world.

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If prices reach $150/barrel (Rs 11,101), like it was recorded in 2008-'09,
India will be up to its neck in deep trouble. The last thing it needs is a
whopping import bill. The impact on the auto sector will also be high
should fuel prices spin out of control.

Segments affected
It is also a given that sales of top-end cars/SUVs or premium bikes may
not suffer as much since their customers are way more well-offand will
not be concerned about paying more for petrol or diesel. However,
compact cars, which are largely sold in smaller cities and towns could find
the going tough if the fuel price spiral continues unchecked.

If the Centre chooses not to rein in prices, it will be tough for commuter
motorcycles and compact cars, especially in those regions without a CNG
option. Those which do have CNG like Delhi, Maharashtra and Gujarat will
get by, although there is no telling how natural gas prices will react to the
current global crisis.

High input costs

The auto industry will be hoping that crude oil prices do not continue to
climb since they have the potential to disrupt the growth story.
Manufacturers are already grappling with the challenge of high input
costs, shortage of semiconductors, making massive investments in
electrification and coping with the reality of a diminishing buyer base in
rural India. 

High diesel prices will stoke inflation, which is already pinching

consumers’ pockets as truck operators increase freight costs. The only
way out is to go in for a slash in excise duties, even if it means foregoing
revenues.

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As per the above statistics, Venezuela has the highest share of oil
reserves followed by Saudi Arabia, India however has 2.2% of oil reserves
and is used only as a backup option or for a national emergency. The rest
is imported from Saudi Arabia (20%) and other Middle eastern
countries(22%).

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 SOLUTION TO THE CRUDE PROBLEM

The way things have ravelled for crude oil is not any surprise. Its history
which repeats itself and has repeated itself in the form of Russia-Ukraine
conflict, Crude price fluctuates mostly on the present situation of the
world economy. Situations like war, cold war, natural disasters, financial
crisis in a country etc. Thus, a long term, dependent solution to such
problem is a must to preserve an auto industry of any country and this
can be only possible with the help of green energy or say green fuel.

The concept of green fuel was discovered long ago and is now making its
way into the auto industry through various developments in this sector.
This sudden and unmanageable shift in the prices and supply of crude oil
has led to countries believe its volatile nature and begin itself preparing
to introduce more and more green fuel options for its automobile
industry.

There are various kinds of green fuel options being invented and
presented in front of government bodies to approve its credibility and its
effectiveness in order to control environmental hazards and co2
emissions in the air, and also to become lesser and lesser dependent on
crude oil.

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 CHAPTER- III

INTRODUCTION TO GREEN FUEL

The term “green” describes any type of fuel derived from biomass. This
incorporates all kinds of organic matter, including plant and animal waste.
As the feedstocks used to make green fuel are sustainable and naturally
replenished, they’re considered renewable and eco-friendly.

Unlike conventional fuels such as oil, which is naturally occurring but

requires an extremely long geological process to form, biofuel can be
produced in a matter of days. A huge variety of feedstocks can be used to
create biofuel, ranging from vegetable oil and crop residue to algae and
by-products from beer breweries. While not all fuels can be scaled up to a
commercial level, the variety reflects the exciting opportunities offered
by biofuels.

A green vehicle, clean vehicle, eco-friendly vehicle, or

environmentallyfriendly vehicle is a road motor vehicle that produces less
harmful impacts to the environment than comparable conventional
internal combustion engine vehicles running on gasoline or diesel, or one
that uses certain alternative fuels. Presently, in some countries the term
is used for any vehicle complying or surpassing the more stringent (such
as Euro6), or California’s zero emission vehicle standards, or the Bharat
stage VI normsenacted in India.

The mission of introducing green vehicle’s is a revolutionary step in the

automobile industry as it means the lesser usage of crude oil and lesser
harm to the environment in itseach way. The major purpose of boosting
mission of green vehicle is not only limited to the problem of availability
and fluctuating prices of crude in the international market but also the
number of environmental hazards and carbon it emits in comparison to
green fuel.

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 TYPES OF GREEN FUEL

There are different types of fuel options available in the automobile

industry and each performs on the capacity of the fuel type. The types
discussed are government approved and are developed accordingly to be
suitable for the current environment norms and international standard
set. Let’s observe the types of fuels available in the world.

1. Compressed natural gas (CNG)

2.Liquefied petroleum gas (LPG)
3.Electric powered Vehicles (EV)
4.Liquified natural gas (LNG)
5. Biofuel
6.Flex fuel
7. Hydrogen powered vehicles(FCEV)
8. Hybrid vehicles(MHEV)

All the above stated types of fuels are present in the automobile
industries in some countries of the world and are successful means of
replacing crude oil. These fuel options are the alternatives available after
immense research and development in the sector and are then made
public in the form of newer car variants. In this process making
alternative fuel cheap and easy to access, the governments of each
country needs to play its vital part in building necessary infrastructure
needed to run these alternative fuel options and for that reason
accessibility needs to be improved in order for that specific fuel option to
thrive and get more consumer demand in the country.

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 WHAT IS NATURAL GAS

Natural gas is mainly used as fuel for generating electricity and heat.
Natural gas in compressed form is used as fuel for vehicles which is
known as CNG and LPG. It is used as fuel for boilers and air conditioners
worldwide. This is used for making fertilizers also, mainly ammonia.

A green field project is going on in Russia to produce LNG to run aircrafts.

Russia, USA, and Canada are major producers & consumers. For
transporting, two variants are used - LNG for cross countries exchange
and CNG for domestic purpose.

Natural gas prices are affected mainly through the US demand and it's
seasonal in nature wherein in winters its prices fluctuate heavily. Also,
they have direct correlation with crude oil prices. It is measured in million
British thermal units (MMBtus), but in some countries it is traded in
Gigajoule also. The world's most liquid derivative contracts for natural gas
are traded on NYMEX, while in India it is traded on MCX.

Two forms of natural gas are currently used in vehicles: compressed

natural gas (CNG) and liquefied natural gas (LNG). Both are domestically
produced, relatively low priced, and commercially available.

Natural gas vehicles (NGVs) can offer an array of economic and

environmental benefits to residents. These may include the economic
benefits of a low-cost, domestic fuel, developing a market for green jobs,
improving regional air quality, reducing greenhouse gas emissions,
reducing our dependence on petroleum, and providing a pathway to a
hydrogen economy.

In 1991, India published the first exhaust emission standards, but there
were no fuel quality standards. In 1993, CNG had become available in
Delhi at three filling stations for industrial and domestic users.As of May
2021, the western state of Gujarat in India had 794 compressed natural
gas (CNG) stations, thereby having the highest number of CNG stations by

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state. In all, the country had 3,180 CNG stations. This major increase in
number of gas filling stations in India in a span of 30 years has led to the
demand on CNG and LPG vehicle conversion and alsorecently automobile
companies have started producing in home production of CNG variant
optioned Car.

Around 30 percent of natural gas is produced domestically, rest all is

imported from various countries in form of LNG. Now a days LNG is
imported from countries like Qatar and USA on long term basis but on
short term the same is also imported from Oman, Iran, Australia, Canada.
Many a times the same is imported on spot purchase basis. Right now,
the LNG terminals are at Dahej and Kochi (operated by Petronet LNG),
Hazira (by Shell), Dabhol / Ratnagiri (by Konkan LNG), Ennor and Paradip
(by Indian Oil) and Dhamra LNG by Adani.

Biofuels on the other hand are the type of fuels that have been extracted
from plants and crops are known as biofuels. Of these, the most
extracted and used one is Bioethanol or simply ethanol and biodiesel. It is
blended with gasoline and can be used as an alternative fuel for your car.
Plant-based fuels come fromrenewable sources, can be grown anywhere
and have lower carbon emissions as compared to fossil fuels. 

Biofuels not only help a struggling economy by providing jobs but also
helps in reducing greenhouse gasses up to much extent by emitting less
pollution.

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 ADVANTAGES OF GREEN FUEL

With the rising awareness of vehicular pollution, more and more people
today are opting for an eco-friendly vehicle. With the help of various
government agencies, NGOs and the UN, many countries have changed
the mind-set of the people, encouraging them to buy cars that cause
minimum or zero pollution to the earth. The main benefit of eco-friendly
cars is that they cause almost zero air pollution, which is contradictory to
the traditional petrol/diesel cars that emit loads of CO2 and other
pollutants. For an environment loving person, this mere benefit is enough
to switch to a green car. With the gas prices skyrocketing, the eco-friendly
vehicles which run on battery have become a viable option. Thus, the
eco-friendly vehicles are more cost-effective than their gasoline
counterparts.

There are various advantages to the concept of green fuel. Let’s discuss
the benefits in detail-

1. Improved air quality

It's the most obvious and immediate environmental benefit, but arguably
one of the most important. Pure electric vehicles don't produce any
harmful emissions and don't even have an exhaust pipe! 

Plug-in hybrid vehicles (PHEVs) work using an electric motor with an

efficient petrol or diesel engine, producing substantially lower emissions
than a normal vehicle. PHEVs can also drive in electric-only mode for a
short period of time, which means zero emissions. 

Although Australia has relatively clean air compared to the rest of the
world, the Department of the Environment and Energy has said there is
still work to do. As our population increases, especially in cities, the
growing demand for energy and transportation will make keeping our air
clean more challenging. 

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And with 87% of Australians commuting to work, according to figures
from the Climate Council, it's clear that investing in electric cars is an
investment in clean air for Australia. The same is the scenario in India
wherein population mainly rely on their own personal vehicles to
commute. According to the survey, out of the 20.05 lakh households
surveyed, 51.78% of the households declared to be owners of personal
vehicles.

2. Decrease in demand for fossil fuels and increased demand

for renewables
Supply and demand is a familiar concept to most people. Undermining
demand for the main contributor to global warming and climate change -
fossil fuels - can reduce the effect their burning is having on the
environment. 

However, there are various expert claims that the demand for fossil fuels
will peak anywhere from 2020 to 2030. Electric vehicles require no direct
fossil fuel energy to run, so a rise in popularity of them would hopefully
stem this growth. Furthermore, a stunted fossil fuel industry would see
support for the renewable industry. 

The population still needs power, so a move away from fossil fuels would
see growth in resources like solar, wind and hydro energy sources. 

This would drive improvements in ways to charge the battery of your

electric vehicle with clean energy sources. 

3. Lower CO2 Emissions

Experts at a UN conference in July warned that if countries weren't on
track to meet their 2030 emission targets by the end of 2020, the world
may face irreversible climate change. 

One of the major causes of global warming is the production of CO2 into
the atmosphere. CO2 is primarily produced by the burning of fossil fuels,
the same fuel we use to power and runmost of our cars. Despite
government assurances that it will address climate change, data released

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in August found Australia's carbon dioxide emissions rose 0.6% in the
year to March 2019.  

As electric cars don't use fossil fuels to run, even the most carbon-
intensive powered hybrid models produce substantially fewer emissions
than normal vehicles. A study from Belgium's VUB University found that
on average, electric vehicles will emit half the CO2 emissions of a diesel
car by 2030. 

Despite this, it's worth noting that according to the Department of the
Environment and Energy, coal and gas account for 85% of electricity
generation; the same electricity which powers green cars. Electric cars
require power, which has to be generated from somewhere, and we're
currently, unfortunately, still heavily reliant on coal.

However, according to projections from Bloomberg New Energy Finance,

the global share of zero-carbon electricity generation is set to increase
from 38 per cent last year to 63 per cent by 2040. 

4. More sustainable consumption 

In good news, Indians hold onto their cars for approximately ten years,
longer than they have done in the past. However, cars are a depreciating
asset for a good reason, as the longer you have them the harder, they
become to maintain. 

Experts say we need to make our assets more durable to have more
sustainable lifestyles. ICAT says a new petrol car's warranty usually lasts
for three years or 100,00km. An electric vehicle, in contrast, will come
with an 8-year warranty or 100,000km. This, of course, isn't to say that's
exactly how long it will last. But given the disparity between the two
figures, it's clear that an electric vehicle is expected to last longer.
Maintenance costs are also considerably lower in electric vehicles, due to
the fewer number of moving parts that go into their production. 

To compare, the average internal combustion engine vehicle has over

2,000 moving parts, while electric vehicles have approximately 20. 

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 CHAPTER- IV

CONTRIBUTION OF GREEN FUEL IN ENERGY BASKET

A full transition from fossil fuels to renewable, clean energy will not
happen overnight, but the need is growing more urgent. Fortunately, so is
the momentum around the issue, Renewables can effectively replace
fossil fuels, creating crucial environmental, social, and economic benefits

Global dependence on oil, natural gas, and coal–and the damage this
dependence inflicts–is well documented. But a transition away from fossil
fuels is in progress and simply needs to be expedited. Alternative
energysources can effectively replace fossil fuels in key areas that keep
industries and countries running, from power to public and private
transport to thermal comfort.

In a practical sense, employment in the renewable energy sector

continues to grow, according to another study by the IRENA. This is
noteworthy, since corporate or individual opposition to long-term change
in energy approach is usually rooted in the perceived short-term effects
on employment, job creation, and economies. But renewable technology
costs are lower than ever, and digitalization can facilitate smoother
integration of the transport sectors. Effective integration will be key to
building a renewable energy-fuelled world, but the possibility is within
reach, as shown by pioneering nations like Denmark, where the
government has committed to phasing out fossil fuels by 2050.

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 CHAPTER- V

IMPLEMENTATION OF GREEN FUEL IN INTERNATIONAL MARKET

The auto sector of the International market had already implemented the
use of alternate sources of fuel from a long period of time, For instance
Toyota began R&D in Hydrogen fuel system about 20 years ago, the time
when rest of the industry was focussed upon better combustion engine
cars, Toyota started to develop hydrogen powered cars, however it is not
yet completed to be able to start producing them for retail market,
Toyota stands at the front and is 20 years ahead in hydrogen powered
cars compared to its competitors. Subsequently, foreign auto companies
were focussed upon providing alternate fuelled vehicles from the
beginning and have successfully implemented it in their respective
countries. Many companies manufacture specific fuelled vehicle only for
a specific country as countries have their own identity of consumer
preference, environment, natural habitat and much more. In this chapter
we will discuss various alternate fuel options available in the international
market and its success or failure in its market.

1) Compressed Natural Gas (CNG):

CNG is available and widely used in U.S., Canada, Mexico, Brazil,

Argentina, Rest of South America, Germany, France, Italy, U.K., Belgium,
Spain, Russia, Turkey, Netherlands, Switzerland, Rest of Europe, Japan,
China, India, South Korea, Australia, Singapore, Malaysia, Thailand,
Indonesia, Philippines, Rest of Asia-Pacific, U.A.E, Saudi Arabia, Egypt,
South Africa, Israel, Rest of Middle East and Africa as well. The adoption
of CNG started from South America and more than 90% of South
American cars run on CNG as its primary fuel.

Compressed natural gas (CNG) is a fuel which can be used in place of

gasoline, diesel fuel and propane/LPG. Due to its affordability and eco-
friendliness, CNG is commonly used in heavy duty transport vehicles. CNG

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is used in internal combustion engines initially developed for petrol and
diesel, which are expected to drive the growth of the CNG industry.

Compressed natural gas (CNG) market will reach an estimated valuation

of USD 1,335.80 million by 2028, while registering this growth at a rate of
30.30% for the forecast period of 2021 to 2028.

As per the graph, North America and Middle East and Africa would see a
significant growth in the CNG market share in recent years.

Asia-Pacific dominates the compressed natural gas (CNG) market due to

the increasing middle class disposable income along with rising
consumption of the product and majority of the public transportation
fleet is being converted to CNG fuel systems supported by government
regulations in the region. North America region is expected to hold the
largest growth rate due to the prevalence of large reservoirs of natural
gas in this region

The growing adoption of stringent government regulations concerning

CO2 emissions, rising number of subsidy provided by government in
emerging countries for CNG, recovering oil prices, increasing need for

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decarbonizing the transportation sector, rising demand of eco-
friendly technology, thereby providing better air quality and
sustainability, prevalence of favourable government policies are some of
the major as well as vital factors which will likely to augment the growth
of the compressed natural gas (CNG) market in the projected timeframe
of 2021-2028. 

WORKING OF COMPRESSED NATURAL GAS AS AN ALTERNATE FUEL

SYSTEM-

CNG works alongside a combustion engine of an auto car, that is CNG

works as the perfect alternate source of fuel which is widely used in the
world. The only problem with CNG is that it requires certain level of
petrol or diesel along with it to perfectly run in a car.A petrol car for
instance runs first 5-7 KMS as engine heats and then converts into CNG
and runs on solely gas, this does not make CNG as the best and complete
alternate fuel but surely it makes a viable option because of its lesser CO2
emissions and availability of gas across the world.

Finally, CNG is available in almost all countries in the world and in India.
CNG cars converted from combustion engine by either i) Auto makers
launch CNG dedicated vehicles in line-up. ii) Retro fitment agencies
convert cars into CNG. The future of CNG is safe as it becomes widely
used alternate fuel and provides great mileage and environment benefits.

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2) Liquified Petroleum Gas (LPG):

The LPG vehicle market is anticipated to register a CAGR of over 7%

during the forecast period (2020 - 2025).

 Currently, global warming has become a major issue around the

world and the public has begun to realize its ramifications. This has
led to a sentiment against the use of gasoline and diesel. The
emission norms in some regions have become so strict that huge
amounts of investment are required to make the vehicles
compliant.
 The strict emission norms in some regions have led to huge
investments to make the vehicles compliant. This has put a lot of
financial pressure, especially on the diesel vehicle manufacturers,
acting as a major driver for the CNG and LPG vehicle market.
 The growth of automotive CNG and LPG can be attributed to
increasing use of alternative fuel in the automotive industry for cost
effectiveness, fuel efficiency, and emission control.
 TheLPG vehicles are growing rapidly in developing countries,
attributed to lower cost of LPG over rising prices of petroleum
products. In addition, CNG and LPG vehicles are considered as a
green alternative of petroleum-operated vehicles.

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  The Asia-Pacific region is the largest market for automobiles in the
world. The region, despite the sluggish growth in the Chinese
market, the largest automobile market in the world, is expected to
lead the growth in the automotive LPG market.

The LPG market is same as the CNG market as it showcases the same
principle as the CNG one.

3) Electric powered Vehicles (EV):

Overall Europe’s car market contracted 22% in 2020. Yet, new electric car
registrations more than doubled to 1.4 million representing a sales share
of 10%. In the large markets, Germany registered 395 000 new electric
cars and France registered 185 000. The United Kingdom more than
doubled registrations to reach 176 000. Electric cars in Norway reached a
record high sales share of 75%, up about one-third from 2019. Sales
shares of electric cars exceeded 50% in Iceland, 30% in Sweden and
reached 25% in the Netherlands.This surge in electric car registrations in
Europe despite the economic slump reflect two policy measures. First,
2020 was the target year for the European Union’s CO2 emissions
standards that limit the average carbon dioxide (CO2) emissions per
kilometre driven for new cars. Second, many European governments
increased subsidy schemes for EVs as part of stimulus packages to
counter the effects of the pandemic.
The overall car market in China was impacted by the pandemic less than
other regions. Total new car registrations were down about 9%.
Registration of new electric cars was lower than the overall car market in
the first half of 2020. This trend reversed in the second half as China
constrained the pandemic. The result was a sales share of 5.7%, up from
4.8% in 2019. BEVs were about 80% of new electric cars registered.Key
policy actions muted the incentives for the electric car market in China.
Purchase subsidies were initially due to expire at the end of 2020 but
following signals that they would be phased out more gradually prior to
the pandemic, by April 2020 and during the pandemic, they were instead
cut by 10% and extended through 2022. Reflecting economic concerns
related to the pandemic, several cities relaxed car licence policies,
allowing for more internal combustion engines vehicles to be registered
to support local car industries.

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Electric car markets in other countries were resilent in 2020. For example,
in Canada the new car market shrunk 21% while new electric car
registrations were broadly unchanged from the previous year at 51 000.

New Zealand is a notable exception. In spite of strong pandemic

response, it saw a decline of 22% in new electric car registrations in 2020,
in line with a car market decline of 21%. The failureseems to be largely
related to exceptionally low EV registrations in April 2020 when New
Zealand was in lockdown.

Another exception is Japan, where the overall new car market contracted
11% from the 2019 level while electric car registrations declined 25% in
2020. The electric car market in Japan has fallen in absolute and relative
terms every year since 2017, when it peaked at 54 000 registrations and a
1% sales share. In 2020, there were 29 000 registrations and a 0.6% sales
share.

4) Liquified natural gas (LNG):

The market of LNG in vehicle segment is limited as LNG is only available in

trucks or for heavy vehicles. The use of LNG in 4-wheel car is not yet
developed as its limitations outweighs its benefits. On the other hand,
unlike CNG it stores water in its tank rather than gas. Making refuelling
only possible for bigger vehicles possible. LNG provides 5x average than
petrol or diesel running vehicle making it affordable and better option to
switch. Additionally, Unlike the price of diesel which is linked to the ever-
volatile oil market, the price of LNG is much more stable, which allows for
more control in business budgeting. See the graph below which
demonstrates the volatility of diesel as compared to LNG.
As LNG is a clean, nontoxic substance it can extend the life of the vehicle
for up to 3 times longer than a diesel engine. Additionally, LNG-fuelled
vehicles require much less servicing. Moreover, depending on the type of
engine, heavy duty vehicles running on LNG produce up to 20-25% fewer
greenhouse gas emissions than diesel powered vehicles.

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5) Biofuel:

Biofuel is a renewable fuel for transport made from biomass – such as

wheat straw, sugar beet or even algae – which can also be used as an
alternative to petrol or diesel.Some biofuels are made from specially
grown crops. In Europe, some of the most commonly usedare wheat,
maize, sugar beet and soybean. However, a downside to growing crops
specifically to make biofuel is that it uses up valuable agricultural land,
which is needed to grow food.
When a relatively small amount of bioethanol – a common type of
biofuel – is added to unleaded petrol, many cars can use the blend
without any engine modifications. All petrol cars manufactured after
2011 use E10, for example, and in most European countries you’re
probably already putting a little biofuel in your car. ‘SP95-E10’ fuel is
labelled ‘E10’ because it contains certain components, like bioethanol,
at up to 10 percent. E10 fuels are widely available in Europe, including
at petrol stations in Germany, Denmark, Hungary, France, The
Netherlands, Belgium, the UK and more. E5 is also available in many
European countries.Diesel sold in Europe generally contains up to 7 or
10 percent biodiesel and is labelled ‘B7’ or ‘B10’.

Biodiesel is the second-most used and produced biofuel in the United

States.

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6) Flexfuel:

Flex-fuel vehicles are such vehicles that can operate with multiple fuels
(or fuel blends). Such technology was created in 1980 and there are
around 2.5 million flex-fuel vehicles in the United States as of today. The
main fuels used include gasoline and several other alternative fuels, such
as pure ethanol (already used in Brazil in automotive vehicles) and blends
of ethanol and gasoline. Already in use in Brazil is an ethanol–gasoline;
blend at a percentage of 20–26% ethanol. Another blend of ethanol–
gasoline (E85), with 85% ethanol, is used in the United States; a blend of
methanol–gasoline also used in the United States has 85% methanol. The
methanol–gasoline blend has a limited potential for commonuse because
most automobile manufacturers do not build fuel systems compatible
with methanol blends. Flex-fuel vehicles have a small processor placed
inside the fuel system; this processor detects the fuel blend being used
and automatically adjusts the ignition time and the mixture of air and
fuel. The greatest advantage of the flex-fuel vehicles is that they can
operate with regular gasoline when alternative fuels are not available or
are not economically competitive just like CNG or LPG.

Flex-fuel cars in the United States are built to utilize natural gas, pure
gasoline, and gasoline blended with a small percentage of ethanol. In
Brazil, flex-fuel motors have to be built to accept a much larger
percentage of ethanol; the larger percentage of ethanol does negatively
affect the life span of the fuel tank and other parts of the engine system,
and the design requirements and shortened system life span add to the
overall expense of the vehicles.

The use of Flex fuel is vast as it can be used alongside of CNG or LPG and
currently is being widely used in Brazil, Argentina and in many parts of
South America. Flex fuel is a great alternate source of crude and is picking
its pace of getting recognized in the west.

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The above table shows mixtures done in order to make a flex fuel
type,this composition as visible is different in different countries but all
such types of mixtures are acceptable as a fuel for any auto car.

7) Hydrogen powered Cars:

When generated using renewable energy, hydrogen gas reduces carbon

dioxide emissions and provides a “greener” alternative to fossil fuels like
oil or natural gas. Hydrogen is created by passing an electrical current
through water to separate hydrogen and oxygen, leaving clean water as
the only by-product. A fuel cell allows the whole process to be reversed
so that hydrogen can then produce electricity easily. Several countries are
working to promote game-changing hydrogen projects.

In England, unlike battery electric vehicles (BEVs), ferries, cars, trucks and
ships powered by hydrogen can be refuelled as quickly as a conventional
petrol or diesel vehicle. Fast refuelling is an important consideration for
London’s Metropolitan Police Service, which has added 11 Toyota Mirai
cars fitted with hydrogen fuel cells to its fleet of response vehicles.The
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zero-emissions police cars can access five gas filling stations throughout
London and this number is set to increase. The new vehicles have a
480km range and rapid acceleration, although top speeds are limited to
around 170km per hour.

BMW and Audi, which are developing hydrogen fuel-cell passenger

vehicle prototypes alongside their fleets of battery cars as part of
preparations to abandon fossil fuels.They are hedging their bets,
calculating that a change in political winds could shift the balance towards
hydrogen in an industry shaped by early-mover decision to take the
battery-powered road to clean cars.

Global auto hub Germany is in sharp focus. It is already betting billions on

hydrogen fuels in sectors like steel and chemicals to meet climate targets,
and closely-fought elections this month could also see the greens enter
the stageand further push the technology.BMW is hydrogen's biggest
proponent among Germany's carmakers, charting a path to a mass-
market model around 2030. The company also has one eye on shifting
hydrogen policies in Europe and in China, the world's largest car
market.The Munich-based premium player has developed a hydrogen
prototype car based on its X5 SUV, in a project already partly funded by
the German government.

Jürgen Guldner, the BMW vice president who heads up the hydrogen
fuel-cell car programme, told Reuters the carmaker would build a test
fleet of close to 100 cars in 2022.

"Whether this (technology) is driven by politics or demand, we will be

ready with a product," he said, adding that his team is already working to
develop the next generation vehicles.

In Japan, the world’s first commercial hydrogen-powered fuel cell car was
produced by a Japanese manufacturer. The Toyota Mira established
Japan as a leader in hydrogen innovation, but the nation harbours big
ambitions to create an emissions-free transport sector.Tokyo authorities
is planning to increase the eight prevailingrefuelling stations to 35 by
2020, so motorists will never be morethan 15 minutes away from a
refuelling point.

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Australia has had an almost negligible presence in green hydrogen
markets to date. But it is looking to step up its participation considerably
as a way of replacing fossil fuel exports with an alternative created with
the country's plentiful renewable energy resources .Canada sees potential
in future green hydrogen markets, not just as a producer of the gas,
based on abundant renewable resources, but also as a manufacturer of
fuel cells. Natural Resources Canada, a federal department, drewthe
opportunity in a paper this month. Along with electric vehicles, Beijing
sees green hydrogen as a potential way of decarbonizing transportation,
WoodMac's Gallagher said. The country's targets include 5,000 fuel-cell
vehicles by 2020 and 1.5 million by 2030.There are also tax exemptions
for hydrogen vehicles. And Wuhan, the capital of Hubei in central China,
is being styled as a hydrogen city with up to 100 fuelling stations for
around 5,000 fuel-cell vehicles by 2025.

Green hydrogen was all the rage a year ago in France. In June 2018, then-
Minister for Ecological and Inclusive Transition Nicolas Hulot vowed to
make France a world leader in hydrogen as he unveiled a €100 million
($117 million) investment plan for the technology.

While the U.S. barely merits a mention in terms of green hydrogen

development, one state, California, is racing to become a world-leading
market.

California’s interest in hydrogen is driven partly by aggressive

decarbonization targets, including phasing out all diesel or natural-gas-
powered buses by 2040, and partly by the presence of some of the
industry’s most high-profile technology developers.

8) Hybrid Vehicles:

Hybrid electric vehicles are powered by an internal combustion engine

and one or more electric motors, which uses energy stored in batteries. A
hybrid electric vehicle cannot be plugged in to charge the battery.
Instead, the battery is charged through regenerative braking and by the
internal combustion engine. The extra power provided by the electric
motor can potentially allow for a smaller engine.

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The overall hybrid vehicle market, by volume, is estimated to be 4,169
thousand units in 2018 and is projected to grow at a CAGR of 8.94% from
2018 to 2025, to reach 7,593 thousand units by 2025. The demand for
hybrid vehicle market is rising due to stringent emission regulation
standards and the growing demand for low or zero-emission vehicles.
Furthermore, governments of various countries provide purchase grants
and tax rebates for hybrid vehicles, including HEVs and PHEVs .

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Pure electric cars are making all the headlines, but their gasoline-electric
hybrid rivals quietly achieved record sales in the United States last year,
industry data showed.

In U.S. sales of hybrid vehicle sales jumped 76% to 801,550 vehicles last
year, accounting for 5% of U.S. light vehicle sales, according to data from
analytics firm Wards Intelligence.Sales of EVs also jumped 83% to
434,879but represented a meagre 3% of the market.Toyota Motor Corp
posted record hybrid car sales for the U.S. market, helping the Japanese
automaker overtake General Motors Co as the top-selling U.S. automaker .

The overall demand of hybrid vehicles has risen in the last few years, but
it is not pure alternate source of fuel as compared to sole electric
vehicles, hybrids run mainly on gasoline and only according to its
compatibility changes from combustion engine to battery powered
vehicle. This does keep a dependency on gasoline too.

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 CHAPTER- VI

IMPLEMENTATION OF GREEN FUEL IN INDIAN MARKET

1) Compressed Natural Gas (CNG):

Indian Automotive CNG &LPG kit Market has reached USD 5.15
Million units in 2019 and projected to expand with a growth rate of
7.77%, in Volume terms, during 2020 to 2026. The market is
expected to generate a revenue of USD 8.68 million units by 2026.
With many Indian cities embarking for cleaner fuel, CNG is gaining
momentum in the Indian automotive market.

Factors contributing to this growth include increasing demand for

more economical fuel compared to conventional fuels and rising
demand for environment-friendly fuel to decrease intensifying
pollution levels in cities in India. Major automakers have also
started integrating LPG and CNG fuel systems into their latest
models. CNG tanks need storage space, the CNG cylinder can be
substantial, the tank's added weight offset by a petrol fuel's
reduced weight. The vehicle's output after installation of the CNG /
LPG package is significantly lowered. Such factors related to the
CNG / LPG package are becoming restrictive in the growth of the
CNG / LPG kit sector in the Indian automotive industry.

The major market players in the Automotive CNG/LPG Kit are

Maruti Suzuki, Hyundai Motor, Mahindra & Mahindra, TATA Motors
Limited, Bajaj, Piaggio, General Motors, Honda Motor Co. Ltd., Ford
Motor, Toyota Motor Corporation, Ashok Leyland, and Other
Prominent Players are expanding their presence in the market by
implementing various innovations and technology. Apart from that
aftermarket retro fitment centres have set up across India to
convert a combustion engine into a CNG/LPG.
The CNG market of India has faced recent backlash because of
EURO-VI approvals not given to aftermarket brands, thus CNG
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 conversion in newer cars has stopped, creating an havoc in the
CNG/LPG industry.According to the Society of Indian Automobile
Manufacturers (SIAM), in India there are 3,500 CNG filling stations
across 293 cities as of now as compared to 1,300 stations in 143
cities in 2019.

2) Liquified Petroleum Gas (LPG):

The LPG and CNG market share the same market characteristics and
the use pf LPG vehicles has decreased in recent years, with the help
from government more and more CNG stations are being installed
and due to that people are moving on to CNG fitted vehicles. Apart
from that LPG system has some limitations and CNG removes those
limitations in its use.

LPG stations all over India are slowly converting into CNG stations
and the use of LPG running vehicles is slowly and gradually
decreasing.

Only Europe is still using LPG as its primary alternate fuel and not
CNG. In India the use of LPG in vehicles is diminishing gradually and
will then be completely take over by CNG as the government plans
to make CNG as the primary green fuel of the nation.

3) Electric powered Vehicles (EV):

The electric vehicle industry in India is picking pace with 100% FDI
possible, new manufacturing hubs, and increased push to improving
charging infrastructure. Federal subsidies and policy favouring deeper
discounts for Indian-made electric two-wheelers as well as a boost for
localized ACC battery storage production are other growth drivers for the
Indian EV industry. Moreover, in September 2021, a production-linked
incentive scheme for the automotive sector was approved by Cabinet to
boost the manufacturing of electric vehicles and hydrogen fuel cell

38 | P a g e
vehicles. India reported sales of over 300,000 EV units in 2021.Catering to
a vast domestic market, reliance on the conventional modes of fuel
intensive mobility will not be sustainable. To address this, federal
policymakers are developing a mobility option that is “Shared, Connected
and Electric” and have projected an ambitious target of achieving 100
percent electrification by 2030.

Regardless of the country’s ambitious targets, India’s EV space is at a

nascent stage. However, looking at it differently – India offers the world’s
largest untapped market, especially in the two-wheeler segment. 100
percent foreign direct investment is allowed in this sector under the
automatic route.

With a combined market share of 90%, 2 Wheelers and low speed L3

Category 3-Wheeleres are the most popular electric vehicles. Due to the
pandemic, EV sales declined in April and May, but sales began to pick up
in June, with a steady growth rate.

Vehicle segment contribution in 2021:

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Electric 2ws- 48%

Electric 3ws- 45%

Electric L5- 3%

Electric 4ws – 4%

The market of EV is said to be on the rise and such significant rise is

revolutionary in its nature,the increasing prices of conventional fuel
are expected to accentuate the development of vehicle
electrification. The stringent emission norms being drafted by the
government and the growing environmental awareness among
Indian consumers are also expected to fuel the demand for electric
vehicles. Furthermore, Indian automakers, such as Tata Motors, and
Mahindra and Mahindra Ltd., have embarked upon aggressive
efforts to add electrified vehicles to their product portfolio, which is
expected to encourage Indian consumers to opt for electric
vehicles.

4) Liquified Natural Gas:

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The liquefied natural gas (LNG) market in India has been witnessing
strong fluctuations, mostly owing to the impact of Covid-related
restrictions in the economy on demand-supply dynamics.

Now, even as demand is bouncing back, strong geo-political movements

could steer the price and supply of LNG in either direction. India, which
currently has LNG accounting for barely 11 per cent of its energy basket,
is aiming to increase it to 15 per cent. However, global price fluctuations
and lack of robust infrastructure, coupled with a low demand from the
electricity sector continue to be major hindrances.

The share of liquefied natural gas (LNG) in India's gas consumption could
rise to 70% from the current 50% in 10 years, and new import terminals
are needed, the chief executive of the country's top gas importer said.
Prime Minister Narendra Modi has set a target to raise the share of
natural gas in the country's energy mix to 15% by 2030 from the current
6.3% to cut its carbon footprint. Indian companies are investing billions of
dollars to strengthen gas infrastructure, including laying 15,000-kilometer
pipelines to supply cleaner fuel to households and industries. India
currently has 17,000 kms of gas pipeline network.

Industries have started to switch from coal-based power to LNG powered

energy machines. This would cut carbon emissions a dozen times in a few
years but using of LNG in automobile sector is far from unknown.
Government is proposing using of LNG in trucks and heavy vehicles and
now European companies have started to put their money in this sector.

5) Biofuel and Flex fuel:

Transport Minister Nitin Gadkari announced on November 11,

2021, that flex-fuel engines will be made mandatory in the coming days.
The advantage of flex-fuel engines is that it can run with 100 per cent
biofuel, unlike a standard engine which develops problem if blending
ratio goes above 20 per cent. The flex-fuel, or flexible fuel, is basically
biofuel made with a combination of gasoline, methanol, or ethanol where
blending ratio may shift from zero to 100 per cent. Moreover,
increasingly, India is using its large inventory of food grains of low quality

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(due to improper storage) to produce biofuel. Earlier, they were used for
fodder for animals. But the tendency is now to use them for producing
ethanol. Surely, this is not a sound proposition as these food grains were
procured at higher prices.

IndianOil R&D has perfected a process to produce biodiesel from various

non-edible oils, especially from Jatropha and Karanjia. The biodiesel
produced has been tested for its properties and meets the stringent
international standards. Extensive field trials have been conducted using
5 and 10% bio-diesel blends in collaboration with Indian Railways,
Haryana Roadways, TATA, etc.
The R&D Centre is now taking several initiatives for promotion of
biodiesel in the country. A state-of-the art quality control laboratory has
been set up to check the quality of biodiesel, as per ASTM/BIS
specifications. IndianOil has entered an MOU with Indian Railways for
plantation of Jatropha on railway land. It is also setting up 10 biodiesel
procurement centres. A reduction of 10 to 15% in smoke density has
been observed with the use of biodiesel blends.

Since an FFV can run on either petrol or ethanol, it will be the first of its
kind 100 per cent dual fuel vehicle to be running on Indian roads. To be
sure, a litre of petrol sold in India has an average of 8 percent ethanol
content even though oil marketing companies have clearance to do even
10 percent (E10) blending. All vehicles manufactured in India are tuned
for E10. All existing vehicles on Indian roads will not be able to run on
higher ethanol content beyond 10 percent.

We had reported back in September that the government is

contemplating issuing on order on the introduction of flex-fuel engines in
India in the next six months. Now, Gadkari has said that he signed a file
on flex-fuel engines quite recently, advising carmakers to introduce
engines that can run on either 100 percent ethanol or 100 percent petrol.

“Yesterday, I signed a file on flex fuel engines (to advice carmakers to

manufacture flex fuel engines,”said the transport minister. Carmakers
have been given a period of six months to introduce this technology. “We
have given them (carmakers) six months to introduce flex-fuel engines in
vehicles that can run on more than one fuel,” he added.

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Although the government has issued an advisory, it does not guarantee
that automakers will be able to meet the deadline. Maruti Suzuki had
previously revealed that they are looking to develop flex fuel vehicles I
Indiaalthough the company hasn’t specified a particular timeline by when
this could happen. Kenichi Yukawa, managing director and CEO, Maruti
Suzuki India Ltd., had said, “We just started studying this and it takes
time.”

6) Hydrogen Powered Vehicles (FCEV):

Green hydrogen can be generated from renewable energy and

abundantly available biomass. Introduction and adoption of technology to
tap into the green hydrogen's potential will play a key role in securing a
clean and affordable energy future for India.

Mirai is one of the few Fuels Cell Electric Vehicles (FCEVs) in the world
and only runs on hydrogen generated electricity .Toyota Kirloskar Motor
(TKM), along with the International Centre for Automotive Technology
(ICAT), is conducting a pilot project to study and evaluate Toyota Mirai on
Indian roads and climatic conditions.

The company claimed that Toyota Mirai is powered by a hydrogen fuel

cell battery pack and capable of providing a range up to 650 km in a single
charge, with a refuelling time of five minutes. This could bring down the
cost of travel to just Rs 2 per km. In Japanese, the word 'Mirai' means
'future'.

Researchers in India have developed a hydrogen-powered motorbike that

its developers believe is ready for commercialization. The technology,
based on a novel metallic hydrogen storage system, may also be modified
for use in cars. As a part of a R&D project, a photo bioreactor for
producing hydrogen from distillery wastes treatment was installed at
Nellikuppam in Tamil Nadu. Other projects were also taken up to produce
hydrogen using solar energy and water through photo
electrochemical/photocatalytic methods. Government of India is also
funding a project at BHU, Varanasi for performance improvements of
hydrogen/metal hydride-based vehicles. Another research project for

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pilot scale production of hydrogen by photo catalytic decomposition of
water using semiconductor photo catalyst, which can be activated by
radiation, is under implementation at BHU. Moreover, BHU has also taken
up a project for the development of hydrogen storage materials and
systems for vehicular applications.

7) Hybrid vehicles (MHEV)

Hybrid cars have been in India for a long period of time and have
picked up a major share of the automobile.

Electric Vehicle is new technology to reduce the carbon footprint

from the environment. Even the best BEVs available in India right
now have a range of 300-500 km, and if there isn’t ample public
charging infrastructure support, users of BEVs can face range
anxiety. Hybrid Electric Vehicles don’t have any such issues – on
short distances.Presently automobile lovers are preferring to shift
to a hybrid alternative than an electric alternative for their IC
engine cars. The main reason being the EV charging infrastructure
still under development. So let’s take a look into the best Hybrid car
options available in India. I will list the top 5 hybrid electric vehicles
that you can buy in India.

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 CHAPTER- VII

GOVERNMENT PLANS FOR THE FUTURE OF GREEN INDIA

As discussed, the government of India has huge plans for the third largest
industry in the world, the automobile sector brings huge tax revenue to
the government in long and short span. For this reason, newer
infrastructure is being set up to fulfil the needs of this industry.
Government has proposed various plans for the change in the fuel type of
vehicles in recent times. That is introducing flex fuel in newer generation
vehicles and establishing green cities by installing many electric stations.
This would help customers opt for electric vehicles as making long
distance trips would become hassle free and government is subsidizing
installation of electric power stations and would give benefits not only to
installer but also to the customer using those stations for refuelling.

To tackle emissions, the government seeks to bring local standards up to

par with global standards, enabling India to leapfrog from BS-4 to BS-6
emissions (the Euro 6 equivalent) by 2020 (Exhibit 1). Additionally, India
has implemented Corporate Average Fuel Efficiency norms in which the
manufacturers have to improve their fuel efficiency by 10 percent
between 2017 and 2021 and by 30 percent or more from 2022.

Additionally, to address pollution from old vehicles, the government is

working on an initiative that focuses on formulation of end-of-life or
scrappage policies. It plans to give incentive for the adoption of these
policies with the help of lower taxes, discounts on purchase prices, and
simple compliance processes.

To reduce dependency on oil imports, the government is promoting

adoption of alternative fuels through FAME2, which is an extension of the
original FAME (Faster Adoption and Manufacturing of Hybrid and Electric
Vehicles) initiative. Where “FAME1” offered incentives to electric vehicles
(EV) and hybrid EV buyers, FAME2 is expected to incentivize
electrification of the public-transport fleet of buses and taxis, as well as
facilitate demand for all types of alternative fuel. Furthermore, to enable
immediate adoption, a lower goods and services tax of 12 percent is

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applied to battery electric vehicles, compared with 31 to 48 percent for
other vehicles.

Government Initiatives

In the automobile sector, Government of India is encouraging foreign

investment and allows 100 per cent FDI under the automatic route. Here
are the following major initiatives taken by the Government of India:

 For road and water transportation,Government is planning to

introduce biofuel vehicles. India needs to look after alternative and
cheaper fuels like methanol and cut fossil fuel imports.

 By increasing custom duty on CBUs of commercial vehicles from 10

per cent to 40 per cent Government of India extended support to
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 the industry and reducing duty on chassis from 24 per cent to 12.5
per cent for ambulance manufacturing.

 New Green Urban Transport Scheme plan introduced by the

Government of India aimed at boosting the growth of urban
transport along with low carbon path for substantial reduction in
pollution with a central assistance and providing a framework for
funding urban mobility projects at National, State and City level by
encouraging innovative financing of projects.

 As highlighted in the Auto Mission Plan (AMP) 2016-26Government

of India aims to make automobiles manufacturing the main driver
of ‘Make in India’ initiative, as it expects passenger vehicles market
to triple to 9.4 million units by 2026.

 In India, for Faster Adoption and Manufacturing of Electric and

Hybrid Vehicles government has formulated a scheme under the
National Electric Mobility Mission 2020to encourage the
progressive induction of reliable, affordable and efficient electric
and hybrid vehicles in the country.

CHAPTER – VIII

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 FINDINGS AND INTERPRETATION

Industry expert’s opinion on the current scenario of CNG/ LPG industry:

As of 2020, retro fitment of CNG and LPG kits is permissible in motor

vehicles under the BS-IV emission norms. After 2020, cars launched in the
market where passed with EURO VI norms, EURO VI emission norms force
automobile manufacturers to use a new kind of catalytic converter. Until
now, catalytic converters were only available with factory-fitted units.
Therefore, if you retrofit a CNG kit then the vehicle would still not be
reducing emissions. We still need to wait for the final notification from
the government to see how they are able to fit the new catalytic
converters in the BS6 models. The government could make the new kind
of catalytic converters available in the after-market and they may be used
to retrofit BS6 vehicles. This becomes impossible for RFC centres to
conduct as a single piece of catalytic converter costs around 1-2 lacs and
with this competitive market of aftermarket CNG makes the price of
regular kit too expensive for customer to budge.

In the past two years, the popularity of CNG powered cars has increased
significantly in India. Manufacturers like Maruti Suzuki, Hyundai and TATA
are offering factory- fitted or company fitted CNG kits on few varient of
their cars. This demand and approval issue has created an havoc in the
aftermarket industry as it shares a market cap of more than 50 crores
annually. Kit manufacturers are battling with ICAT to lower the difficulty
of the norms and make it fair from all aspects. Apart from that to make
things worse, all kit manufacturers have to if approved then renew their
brand approval every 3 years. The total cost of approval lies around 3-7
crores. This industry of such size does not make it viable for regular
investment of 5-7 cr every 3 years, the total cost of getting BS- VI
approval also rose significantly.

From the experts views, this industry is facing a backlash as also

customers and citizens are not supporting this move of governments
supporting establishes large sized companies in India. This would totally
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make the CNG/LPG industry seize to exist. Gujarat alone has a market of
6000 CNG conversion vehicles over a month. Delhi, Maharashtra, UP,
Bihar, South India has the potential of a huge market and with such
problems in hand, the industry is going through a huge setback in its
history.

Electric the major competition to CNG/LPG industry, industry expert

Numaan has shared his conversation with CNG market players and has
come to the conclusion that “CNG/LPG industry do not consider electric
as of now as their main rival. They think that electric still got time to enter
into the market and steal their market share off them.The reason they
shared, Infrastructure needed for consumers to totally switch to electric
is not present across India and government plans to make it possible is
long term. The electric revolution is a fact and it would take some time
but eventually it would happen. The market of CNG/LPG might have not
come to a hault if not for BS-VI norms and would have continued to rise
at a good rate.”

The government has therefore issued the guidelines recently to kit

manufacturers like Motozen, Zavoli, Mijo, Lovato, etc. The issued
guidelines/norms are very difficult to comply with the given standards.
This has made the kit brands to move against the ICAT and fight till norms
are not levied as per their terms.

CHAPTER – IX

CONCLUSION

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In this dissertation we talked about the concepts of various alternative
fuels available in the world and tried to compare its feasibility in other
nations with India. The data supported the fact that India compared to
other nations still is n need of heavy infrastructure investment and only
more infrastructure could make the use of alternate fuel a success in
India.

As per industry experts’ opinion discussed above, we came to know the

challenges faced by the CNG/LPG industry for over 2 years. We came to
know about the insights about this industry and with the help from the
primary data shared by the industry expert Numaan, market mentality is
also clarified in the statements given. The CNG/LPG is a growing industry,
and two players are involved in this industry ie. Company fitted CNG kits
or aftermarket CNG installation centres. This growing industry’s benefit
currently are only being entertained by companies like Maruti, TATA,
Hyundai etc. such companies have the approval of BS-VI,whereas on the
other hand, aftermarket retro fitting centres are losing this business as no
approval has been issued to them for about 2 years and slowly and
gradually are losing their share of the market against company fitting
CNG.

The future of electric is imminent, but with the secondary data

supporting the fact that still India is in no position to make EV as its major
car seller, the fact that fewer electric stations are present currently makes
it harder for consumers to decide as long-term drives become obsolete
because of fewer repowering stations available anywhere. As the
infrastructure would develop people would slowly and gradually shift
towards electric, comparing it with the market of US, UK and China. The
only difference maker is the number of electric stations available in India.

Indian companies have experienced a surge in hybrid cars as its demand

has soared in recent years. Companies like Maruti XL6, Hyundai, and
many low segments as well as higher segment vehicles concept of hybrid
fuelling system has attracted many customers recently.

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The long-term future still excites many about hydrogen, currently the
research and development of hydrogen run vehicles is in process, but
Toyota has been researching hydrogen for about 20 plus years and its
being said in the market that Toyota is 10 years ahead of its competitors
in hydrogen technology. Toyota mirai was the first hydrogen-based car
but is not available for the consumers as still developments in its engine is
in process. The future of hydrogen is not completely in spot as still the
usage and viability is in shadow and no concrete data or report is
available as of now.

Finally, the options proposed by government on bio diesel, flex fuel are
efficient and have proven successful in the international market.
Introducing such fuel options would only benefit to the governments,
consumers and the environment in general. The future planning of the
government is on track with the amount of investment proposed for
infrastructure the revolution in automobile industry could become reality
in some time. The Indian automotive sector has the capability to become
the number one industry in the world if curated accordingly. The
proposed future plans could make this happen. The only thing this
industry needs is better government support in view of tax regime,
investment outlook and friendly policies to make it a successful industry.

CHAPTER- X

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