NEW DELHI

India has unveiled plans to transition a third of its heavy-duty long-haul trucking fleet from diesel to liquefied natural gas (LNG) within the next five to seven years. This initiative, detailed in a draft policy released by the federal oil ministry last week, represents a significant shift in the country's approach to transportation fuel and environmental policy.

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As one of the world's largest emitters of greenhouse gases, India has set an ambitious goal to achieve net-zero emissions by 2070. The proposed transition to LNG for a substantial portion of its trucking fleet aligns with this long-term objective and aims to increase the share of natural gas in India's energy mix from the current 6% to 15% by 2030. 

The move comes as India lags behind other major economies, particularly China, in adopting alternative fuels for heavy-duty vehicles. While China has made significant strides in implementing electric vehicles and LNG-powered trucks, resulting in a noticeable impact on its oil demand, India's transition has been comparatively slower.

Diesel consumption currently dominates India's refined fuel usage, making this proposed shift particularly impactful. As the world's third-largest oil importer and consumer, any reduction in India's diesel consumption could have far-reaching implications for global oil markets, potentially freeing up additional diesel supplies for international trade.

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The draft policy acknowledges that while compressed natural gas (CNG) is already in use for some cars and buses in India, LNG offers superior range capabilities, making it a more suitable option for long-haul trucking. To support this transition, Indian oil and gas retailers are in the process of establishing 49 LNG dispensing stations as part of an initial phase.

One of the key challenges identified in the policy is the current lack of uniformity in LNG pricing across India due to variations in state taxes. The government plans to address this issue by working towards a consistent LNG price nationwide, which would be crucial for the widespread adoption of LNG-powered trucks.

To kickstart the initiative, the government proposes allocating 0.5 million cubic metres of domestically produced gas per day to meet the fuel needs of approximately 50,000 trucks over a two-to-three-year period. This allocation aims to provide a stable and affordable fuel supply during the critical early stages of adoption.

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The significance of this policy becomes clear when considering the scale of India's current heavy-duty vehicle fleet. As of March 31, 2020, India had 5.8 million registered trucks and lorries, along with 1.6 million multi-axle articulated vehicles. These heavy-duty vehicles are responsible for a majority of the energy-related carbon dioxide emissions within India's transport sector. 

The draft policy emphasises the environmental benefits of LNG, stating, "In order to reduce vehicular pollution in the transport sector, there is a need to promote LNG in heavy-duty vehicles.... LNG has a 24 per cent lower emission factor than diesel." This reduction in emissions could significantly contribute to improving air quality in India's cities and reducing the country's overall carbon footprint.

However, the successful implementation of this policy will require overcoming several challenges. These include developing the necessary infrastructure for LNG distribution and refuelling, addressing the higher upfront costs of LNG-powered vehicles, and ensuring a stable and competitively priced supply of LNG.

The policy's success could have wide-ranging implications not only for India's energy landscape but also for global efforts to combat climate change. As one of the world's fastest-growing major economies, India's energy choices have significant consequences for global emissions trajectories.