Increasing Auto LPG usage for a cleaner environment: What could India Learn from Other Global Examples

Increasing Auto LPG usage for a cleaner environment: What could India Learn from Other Global Examples
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As part of its efforts to improve air quality, South Korea is aggressively promoting the use of auto LPG as a road transport fuel. The country which hitherto allowed
LPG fuel only for taxis, rental cars and vehicles for disabled people, has now lifted restrictions to allow private cars to convert to auto LPG at a large scale. The country which is already the largest auto LPG consumer in the world, now seeks to further expand its environmental benefits. With an estimated 27 million vehicles running on it, Auto LPG is globally the most popular alternative transport fuel to petrol and diesel. This has not happened by chance. A number of governments around the world have actively encouraged the use of this fuel in recognition of its environmental benefits, as well as its inherent practical and cost advantages over conventional and other alternative fuels. The use of Auto LPG is also widely prevalent in Turkey, Russia, Poland and Italy, to name a few. In fact in Turkey, more cars are running on Auto LPG than on petrol while in Australia a whopping 615,000 Autogas cars are already on the roads.

Unfortunately, despite having a significant price advantage over petrol and diesel and practical benefits and viability in immediate deployment, Auto LPG has achieved only marginal success in India. Worse still, a number of policies are actually hampering its growth at a time when we need to deploy clean transport alternatives swiftly.

LPG has a global warming potential factor of zero

Inspired by Swedish activist Greta Thunberg, 6 million climate protesters hit the streets across the world last month, demanding immediate action to curb greenhouse gas emissions. With the threat of climate change looming large, the need for rapidly deploying clean fuels for transport has never been more pronounced. It needs to be underlined that road transport constitutes a major source of greenhouse gas emissions. It is estimated that road transport is responsible for approximately 17% of Greenhouse Gas emissions in EU. In India, transport sector is the third most GHG emitting sector, with the major contribution coming from road transport.

Here, auto LPG stands as a highly viable alternative which can clean up our transport sector. According to the UN International Panel on Climate Change (IPCC), LPG is not a greenhouse gas, meaning it is assigned a global warming potential (GWP) factor of zero. The GWP factor of CO2 is 1 while that of methane is 25. In comparison to most hydrocarbons, LPG has a low carbon to hydrogen ratio, which means that it generates lower amounts of carbon dioxide per amount of heat produced. At the same time, emissions of harmful nitrogen oxides (NOx) and harmful particulate matter PM 2.5 are also negligible for auto LPG. Not only does this make auto LPG a cleaner transport fuel choice than petrol and diesel but also as compared to CNG.

It can therefore play a very important role in mitigating greenhouse-gas emissions until ultra-low or zero-emission vehicle technologies such as Electric Vehicles become commercially viable on a large scale, which is probably a decade and a half away.

The Turkish example

Turkey accounts for 11% of the global consumption of autogas with a network of 10,000 LPG stations. In fact, autogas consumption has more than doubled since 2010 in Turkey, reaching 3.14 million tonnes in 2016. When Turkey began the process of promoting auto LPG as a road transport fuel a few decades back, it required several years of extensive communication campaigns. Supportive government policies, low tax, widespread availability of the fuel through gas stations and a constant price advantage over petrol gradually made autogas a preferred choice. Easy availability and accessibility to conversion centres had been another positive factor. Thanks to sustained government and private efforts, almost 40 percent of all private vehicles in Turkey run on auto LPG today. Consumption of auto LPG overtook that of petrol in 2009, making Turkey the only such country in the world.

The South Korean example

South Korea was one of the first countries to extensively promote auto LPG way back in the 1970s. Environmental restrictions on diesel vehicles and strong government support for the use of auto LPG in taxis, fleet vehicles and public buses helped make South Korea the largest consumer of auto LPG. By 2010, consumption had reached close to 4.5 million tonnes with almost 2.5 million vehicles running on the fuel. With concerns of air pollution and high content of harmful PM 2.5 in the environment, the country has now lifted restrictions on the use of auto LPG in private vehicles, opening another round of surge in consumption and improvement in air quality.

The Russian example

In Russia, a law adopted in 2012 set out a goal of promoting the use of auto LPG and natural gas as alternative fuels, along with EVs. While low tax boosts the competitiveness of auto LPG, a supportive government policy that encourages vehicle conversion to auto LPG has helped the country scale up usage of the environmentally friendly fuel. Russia is today the world’s third-largest autogas market after Korea and Turkey.

What India can gather from the above examples

It is evident that a policy environment that supports the sale and usage as well as conversion to auto LPG accompanied by a low tax regime has significantly helped scale up the consumption of the environmentally amenable fuel in several countries. India has in recent years laid out a major policy thrust on moving its road transport sector away from petrol and diesel towards Electric Vehicles. This long-term thrust however is missing out on the readily deployable auto LPG which can clean up the environment in the short and medium term. Given the fact that existing conventional vehicles can easily be converted to run on autogas and bring immediate benefits, we need supportive policies to utilize it in a better way.

Unfortunately, Indian policies – as yet, have not been very amenable to the auto LPG sector. The government must consider reducing the prohibitive GST rate of 28% on auto LPG conversion kits, and lowering the GST on auto LPG to 5%, which currently stands at 18%. If backed by effective policy interventions, auto LPG can act as a “bridging fuel” in the transition to a zero-emission energy system that is likely to last decades. Also, an immediate reform is required in the existing Type approval rules for retrofitment kits. The existing Type approval norms require companies to renew prohibitively costly Type approvals every three years. These rules which are in a complete variance of international norms are having an enormously detrimental effect on the retrofitment market.