India’s transportation sector is the third largest energy consumer, contributing about 10 percent of the total national greenhouse gas (GHG) emissions. Road transportation alone contributes about 87 percent of the total emissions in the sector. Decarbonizing transport by decreasing oil dependency, improving energy efficiency, and reducing vehicle emissions is a pressing need of the hour for a fast-urbanizing country like India. India’s Prime Minister Narendra Modi’s recent state visit with US President Joe Biden in Washington was a key milestone in developing a cooperative ecosystem towards clean energy transition, specifically in the transport sector. The key highlights from the joint declaration between the USA and India include:
- To accelerate the deployment of zero-emission vehicles.
- To promote public and private financing for electric transportation.
- To support Indian Railways’ target of becoming a ‘net-zero’ carbon emitter by 2030 (An MoU was signed under which the U.S. Agency for International Development (USAID) will provide the support).
- To create a payment security mechanism to facilitate the deployment of 10,000 made-in-India electric buses.
- Development of a first-of-its-kind, multibillion-dollar investment platform to lower the capital cost and attract international private finance in greenfield renewable energy, battery storage, and emerging green technology projects in India.
- Launch of Global Biofuels Alliance in July 2023, with the US as the founding member, to promote the development and production of biofuels (including sustainable aviation fuels) at large-scale.
- Include India in the Mineral Security Partnership (MSP), which was launched in 2022 as a multilateral initiative of 13 countries to secure a stable supply of critical minerals for achieving climate, economic, and strategic technology cooperation goals.
- Continue the support of the International Energy Agency (IEA) to ensure reliable, affordable, and clean energy supply across the member countries.
- Accelerate cooperation in green hydrogen, offshore and onshore wind, and other emerging technologies through the newly launched U.S.-India New and Emerging Renewable Energy Technologies Action Platform as a key part of the U.S.-India Strategic Clean Energy Partnership (SCEP) (launched in 2015).
- Achieve respective national goals to reduce the cost of green/clean hydrogen through the launch of the multilateral Hydrogen Breakthrough Agenda. The Hydrogen Breakthrough Agenda is a group of countries that are committed to making affordable renewable, and low-carbon hydrogen globally available by 2030.
Alignment with India’s Climate Goals in Transport Sector
The joint declaration is a much-needed catalyst for India to achieve its key climate goals under the Paris Agreement, which includes reducing the annual carbon emissions intensity of its Gross Domestic Product (GDP) by 30-35% below 2005 levels by 2030. Identifying the significance of electrification in decarbonizing the transport sector, the Indian government has since 2013 invested in developing many policy frameworks to promote the adoption of electric vehicles (EVs) in the country. The following points map out the areas where the joint declaration aligns with the existing national policies:
- Promotion of manufacturing of EVs
The Faster Adoption and Manufacturing of Electric Vehicles (FAME) India scheme, which was launched in 2015 (revised twice in 2019 and 2022), enlists the provision of incentives to manufacturers of EVs. These incentives, which include subsidies and tax breaks, are designed to make India a global hub in EV manufacturing. With India’s entry into the multinational Mineral Security Partnership (MSP) under the joint declaration, the Lithium Ion Battery (LIB) supply is expected to be more steady and affordable, thereby reducing the capital cost for EV manufacturing.
- Development of charging infrastructure
The FAME India scheme also provides incentives for developing charging infrastructure for EVs. These incentives are designed to make it easier for people to use electric vehicles. Establishing a multibillion-dollar investment platform under the US-India joint declaration can immensely assist in providing financial support to scale up the provision of charging infrastructure in cities which is currently inadequate and creates a major barrier to EV acceptance among users.
- Promote indigenous manufacturing of EVs and creation of jobs
One of the aims of the 2013 National Electric Mobility Mission Plan (NEMMP) is to promote indigenous manufacturing of EVs in India. The focus is to reduce India’s reliance on imported technology and help to create jobs in the domestic manufacturing sector. The creation of a payment security mechanism to facilitate the deployment of 10,000 made-in-India electric buses can surely boost the local EV manufacturing industry. Moreover, the use of blockchain technology can benefit payment security by improving transparency, security, and efficiency in terms of time and cost. However, with no specific regulation for blockchain technology in India yet, authorities may require to adopt appropriate legal mechanisms for standard regulations.
- Reduce dependency on fossil fuels
Both the FAME India scheme and NEMMP underscores the need to also invest in other renewable sources to address transport energy demand and reduce high dependency on fossil fuels. The launch of the multilateral Hydrogen Breakthrough Agenda can immensely assist in improving funding to research and develop innovative hydrogen technologies, especially in areas of its production, storage, and transportation. In addition, appropriate policy and regulatory frameworks can be developed along with public–private partnerships for scaling up hydrogen technology.
- Establish an efficient battery manufacturing ecosystem
2019 launched National Mission on Transformative Mobility and Battery Storage (NMTMSB) by the Department of Heavy Industry, Ministry of Heavy Industries & Public Enterprises, aims to promote the adoption of electric vehicles and battery storage technologies in India. One of the specific objectives is to develop a Phased Manufacturing Program (PMP) for electric vehicles and batteries. The multibillion-dollar investment platform has the potential to attract private finance for battery storage-related projects in India.
- Improve air quality in Indian cities
Under India’s Smart City Mission (launched in 2015), a special focus is given to promoting the use of EVs, improving fuel efficiency, and promoting public transport to improve air quality in Indian cities and make them livable and sustainable. The commitment to invest in Indian railways, buses, and private vehicles to make them net-zero emitters under the joint declaration directly assists in achieving the aim of India’s Smart City Mission.
The joint declaration between the USA and India is a major step forward in the fight against climate change. The declaration includes a number of commitments that will help to decarbonize the transport sector in India, including accelerating the deployment of zero-emission vehicles, promoting public and private financing for electric transportation, and supporting Indian Railways’ target of becoming a net-zero carbon emitter by 2030. The declaration also includes investments in greenfield renewable energy, battery storage, and emerging green technology projects in India. These initiatives will certainly help boost investments and address the key bottlenecks, putting India on the right track of green energy transition in the transport sector and can act as a model for nations in the global south.
Dr. Megha Tyagi, Senior Transport Planner
Picture Courtesy: Irena