India's transport future balances fossil fuels and clean technology

Fossil fuels will continue to play an important role in India’s transportation sector, even as alternative fuel technologies see multifold growth. A study titled ‘Road map for Indian Transition in the Transport Sector’, released by TERI — The Energy and Resources Institute, concludes that fossil fuel demand for transportation, even in the most ambitious decarbonisation scenario, will begin to decline after 2050-51 and fall below FY31 levels by FY71.

 

The study says that natural gas will dominate fossil fuel demand, gradually replacing petroleum products. In the highly ambitious decarbonisation scenario, fossil fuel demand is projected to reach between 188 and 206 million tonnes of oil equivalent (Mtoe) by FY71, with natural gas accounting for 99 to 157 Mtoe. 

 

This study is especially relevant as numerous countries, including India, have committed to achieving net-zero emissions by 2070.

According to the projections, the number of on-road vehicles in India will increase fivefold, from 204 million in 2019-20 to 966 million by FY71. However, the dominance of two-wheelers will decrease as the adoption of four-wheelers grows. By FY31, two-wheelers will account for 72 per cent of all on-road vehicles (down from 74 per cent in 2019-20), but this share will decline further to 58 per cent by FY51 and 53 per cent by FY71. 

In contrast, the share of four-wheelers will rise from 21 per cent in FY31 to 33 per cent in FY51 and 36 per cent by FY71. 

This shift is also evident in the EV market. The study outlines four potential scenarios for EV adoption, ranging from a baseline scenario to a highly ambitious one. Projections for the number of EVs in FY71 vary considerably, from 220 million in a conservative decarbonisation approach to 858 million in the ambitious scenario. EV battery demand will also vary widely, ranging from 4.5 terawatt-hour (TWh) to 23.5 TWh.

 

The research indicates that, with increasing EV adoption in the passenger segment, 70 per cent of the battery energy demand will come from the transport sector. Of this, 52 per cent will come from four-wheelers, while medium- and heavy-duty vehicles in the freight sector will drive 10-29 per cent of the demand for EV batteries.

 

Regarding raw materials, the study highlights that nickel is the most critical material for lithium nickel manganese cobalt batteries, making up 72 per cent of the total mineral requirement for the cathode. Lithium follows at 11 per cent, with cobalt and manganese at 9 per cent. In the ambitious scenario, India would need 1.9 million tonnes (mt) of lithium and 12.7 mt of nickel to produce the required batteries.