During the recent G20 Summit, Prime Minister Narendra Modi launched the Global Biofuel Alliance alongside the leaders of Singapore, Bangladesh, Italy, USA, Brazil, Argentina, Mauritius and UAE on September 9 in New Delhi. The alliance intends to expedite the global uptake of biofuels and necessary infrastructure.
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To this effect, Nitin Gadkari reported that currently India imports 89 percent of its fossil fuels, this has a direct effect both in terms of national expenditure and increasing pollution in the country. The minister urged stakeholders to explore alternate fuels as India would soon move towards biofuels and other sustainable energy resources, in line with PM Modi’s objective of becoming carbon-neutral by 2070. Apart from biofuels, India’s current power basket has 39 percent of solar power, moreover, hydrogen and thermal projects are underway as well with a big focus on green hydrogen.
During his speech, Gadkari urged industry stakeholders multiple times to move away from producing diesel run passenger vehicles and commercial vehicles. While he applauded the fact that diesel share in the PV market has fallen from 83 percent in 2014 to 18 percent in current year, he also emphasised that both petrol and diesel need to be left behind as soon as possible. To this effect, he even claimed that he may speak with Finance Minister, Nirmala Sitharaman, to propose a ‘pollution tax’ or extra 10 percent GST on diesel vehicles to discourage their sales.
Shortly after the event, the official X handle of the Union Minister issued a clarification saying ‘there is no such proposal currently under active consideration by the government’, however, the minister seemed sincere in his intention to drive India towards sustainable mobility and OEMs may need to consider removing diesel models from their portfolios altogether.
There is an urgent need to clarify media reports suggesting an additional 10% GST on the sale of diesel vehicles. It is essential to clarify that there is no such proposal currently under active consideration by the government. In line with our commitments to achieve Carbon Net…
— Nitin Gadkari (@nitin_gadkari) September 12, 2023
During a quick chat with Hardeep S. Brar, Vice President, Head of Marketing and Sales, Kia India, we asked him to share his thoughts on the concept of a ‘pollution tax’ and what it could mean for major carmakers who have diesel models in their portfolio. Citing the freshly issued statement from Gadkari’s X handle, Brar told TOI Auto, that while the shift towards electric is already underway, diesels cannot be phased out on the drop of a hat. It is still the primary fuel used in heavy industries such as logistics and that the focus should be on developing a competitive biofuel and EV charging infrastructure. Almost 1/3rd or 32-35 percent Kia cars sold in the country right now are diesel run and when the time comes to shift towards biofuels and electric only, the carmaker is prepared to revamp its portfolio.
Jammu and Kashmir lithium reserves:
The recently found lithium reserves in Jammu and Kashmir was another key highlight that Nitin Gadkari touched upon at the convention. He reported that India currently imports 1,200 tonnes of lithium and that the domestic reserves could help mitigate that expenditure as well. While the minister would like the lithium extracted as soon as possible, even he cannot fast track the process of validation, extraction and processing to acquire battery grade lithium. However, he has proposed to involve private players in order to accelerate the extraction of the lithium from the Jammu and Kashmir reserves to the government.
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Overall, the message for the auto industry was very clear. Move towards sustainable mobility solutions as quickly as possible, otherwise others will get ahead. ’Today we have over 30 lakh EVs registered in the country, which marks a 300 percent rise in EV sales. I want production of electric buses, cars, scooters and rickshaws to increase more, sky is the limit. The OEMs who will stay with the pace of the market will succeed, those who waste time will lose. New designs, technology and better quality products are already here. Time is the most important capital for auto industry and you need to capitalise on the opportunity.’ Gadkari said in his last words, addressing industry stakeholders.
The Indian automotive industry has grown to Rs 12,46,000 crore (Twelve Lakh Forty Six Thousand) in its market size, including 3,00,000 (Three Lakh) crore in exports. In 2022, we became the third largest automotive market climbing four positions up from being the seventh largest in 2014. Being the industry which pays maximum direct and indirect taxes to the government, the focus is on the automotive industry to drive the Prime Minister’s vision of becoming ‘Aatmanirbhar’ and achieving the 5 trillion dollar economy benchmark in the next three to five years.