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Inox India and the LNG Boom
A few months ago, Hertz, a rental giant, was in news for dumping its EV fleet in favour of gas cars.
The reason? The hidden costs of EV ownership.
The move led to some correction in Tesla and another EV maker Polestar.
Back in India, while the EV penetration is unfolding in two and three wheelers, lack of infra and cost related reasons have led to slow adoption in 4 wheelers and heavy-duty vehicles.
As the future of electrification is being discussed amid subsidy related developments, a new fuel trend is about to emerge. For its long-haul trucks and heavy-duty vehicles, India is planning to use LNG. The target is to have a third of the fleet run on LNG instead of diesel in five to seven years.
With this move, India plans to target pollution and cut dependence on diesel and increase the share of natural gas from 6% to 15% in the energy mix.
Is this just another target or a real opportunity?
Well, other countries give some confidence.
While China has a fleet of over 800,000 LNG trucks on its roads, the number in the US and Europe is estimated to be 15,000.
In comparison, India is still taking baby steps, with hardly 500 such trucks on the road. To be sure, at present, this is a bit of chicken and egg situation.
A large-scale adoption needs infrastructure of LNG filling stations which is lacking. For LNG filling stations to be viable, there needs to be an LNG based fleet that can justify that investment (which isn’t there yet).
To start with, the government is setting up first 50 LNG fuel stations along the Golden Quadrilateral. By 2030, the plan is to develop 1,000 such stations. This side of the supply chain will be catered by companies in the oil and gas sector – IOCL, BPCL, HPCL, GAIL, Petronet LNG, Gujarat Gas and their joint ventures/ subsidiaries.
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