Deloitte unveils ‘Fuels of the future’ report at the 5th edition of ETAutoTech Summit 2024 – ET Auto

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Deloitte unveils ‘Fuels of the future’ report at the 5th edition of ETAutoTech Summit 2024 – ET Auto


The report highlights the increasing adoption of EVs as a formidable competition to alternative fuels, particularly in the two-to-four-wheeler segments, over the next two decades.

New Delhi: Deloitte India today launched a report on “Fuels of the future: Exploring alternative fuel options for transport,” at the 5th edition of ETAutoTech Summit 2024. The report emphasises India’s accelerating shift towards sustainable energy solutions and the steps on cleaner, safer and greener fuel transitioning strategy creating newer avenues of collaboration amongst the ecosystems.

The report highlights the increasing adoption of EVs as a formidable competition to alternative fuels, particularly in the two-to-four-wheeler segments, over the next two decades. This transition is pivotal as India strives to meet its interim goal of reducing greenhouse gas (GHG) emissions by 2030. The government has allocated INR 2671.33 crore for the FAME III scheme in this year’s Interim budget, with more details expected in the main budget in July 2024.

While the priority is achieving carbon neutrality and reducing fossil fuel dependence, EVs remain the first choice. Despite COVID-19 supply chain disruptions, global EV sales surpassed 10 million units in 2022; BEVs accounted for nearly 70%. The outlook remains robust, with annual EV sales projected to hit 31.1 million units by 2030, per Deloitte.

Deloitte’s new report articulates various alternative fuels, including Natural Gas (NG), Liquified Petroleum Gas (LPG), Biofuels, Green Hydrogen (GH), and Electric Vehicles (EVs) for India Inc. to evaluate environmental benefits, scalability and infrastructure requirements.

As India aims to become a multimodal logistics hub, transitioning to alternative fuels is essential to cut fossil fuel imports and mitigate environmental effects. The report emphasises the need for strategic, coordinated efforts to achieve a greener, sustainable future for India’s transportation sector.

Here are the key findings and projections from the report-

Electric Vehicles (EVs):

EV penetration could rise significantly in the medium term, driven by supportive government policies and decreasing production costs. This trend is expected to maintain a strong presence until 2040–2045. Along with BEVs, PHEVs and HEVs will also drive the consumer shift from traditional fuels in the short term.

Deloitte’s analysis anticipates a decline in EV adoption post-2045 as greener fuel options such as Green Hydrogen will become more prevalent and technological advancements will enhance fuel efficiency.

Biofuels and Green Hydrogen (GH):

Although currently at a nascent stage, the domestic production of biofuels and GH is expected to surge, with notable increases in biofuel adoption anticipated from 2025 onward. Government support and technological advancements will be pivotal in this transition, leading to a significant uptake of these fuels.

Deloitte’s analysis expects that GH, especially as a combustible fuel, will outpace EVs in the long run.

Natural Gas (NG) and LPG:

The adoption of natural gas and LPG will increase shortly. Deloitte’s analysis anticipates it to peak by 2040 and start declining within a decade due to high competition from less import-dependent alternatives with better sustainability profiles becoming increasingly available.

Rajeev Singh, Partner and Consumer Industry Leader, Deloitte Asia Pacific, said “With the Union budget 2024-25 approaching, the government’s push for EV adoption is perceivable. Hybrid vehicles have also been instrumental in this green transition, and we expect significant government initiatives to bolster India’s overall EV ecosystem. This includes enhancing domestic R&D, expanding component manufacturing and upskilling the workforce.”

He further added, “India is at a critical juncture for energy security and sustainable development, necessitating a shift to cleaner energy sources. The growing presence of EVs will challenge other alternative fuels, especially in the two-to-four-wheeler segments. We anticipate a government push for GH adoption, using abundant renewable energy to reduce fuel import costs. Success will depend on reducing domestic production costs. Our report guides industry leaders in integrating alternative fuels across vehicle segments. As India nears its centenary of independence, GH will be pivotal in shaping mobility. OEMs and component manufacturers must remain agile, recognising that each segment has unique needs.”

  • Published On Jun 20, 2024 at 01:38 PM IST

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