India Can Save Rs 4.15 Lakh Crore Per Year On Oil Imports Starting 2030 Says CII

The promotion of electric vehicles in India has been in full swing for the past few years. Several Indian authorities are to be thanked for this. This encouragement towards electric drivetrains, however, can further be propelled through additional measures, says CII (Confederation of Indian Industry) in a recent statement.

The assertion basically points at the ongoing FAME (Faster Adoption & Manufacturing of (Hybrid and) Electric vehicles) scheme that is paving the way for India¡¯s EV future. CII says that the strategy needs to be complemented with other measures to boost the mass adoption of electric vehicles. These measures include electric vehicle market creation and adoption, skill development in the industry and more.

CII also stressed on the domestic manufacturing of electric vehicles, their batteries and components for this, further complemented by a strategic sourcing of key raw material required for the production. In the case of electric vehicles, these raw materials would largely mean lithium and cobalt, used for the batteries of EVs.

"Effectively managing energy use with growth and reducing India's oil intensity; developing high-grade energy infrastructure; ensuring an environmentally sustainable future and promotion of clean air and electric vehicles have been carved out as key work areas for CII this year," CII President Vikram Kirloskar said.

(Representative Image: BCCL)

What does it mean for India?

Despite the government¡¯s continued efforts to bring in EVs for India¡¯s transportation needs, EV adoption stands at only 1% of the total vehicles in India at present. CII suggests that the incentives and other benefits offered through the FAME scheme should come in succession to several prerequisites to have the maximum effect.

Consider it this way, the electric vehicles, once in use, will need energy to run and this energy can be garnered through various sources. But in order for these EVs to truly go green, the source must be a renewable one, meaning a corresponding rise in renewable energy generation is required in the country. Another part that would help is using environmentally sustainable batteries for these EVs.

What is at stake?

The CII quoted a study by the Centre mentioning a 64 percent reduction in the energy requirement of India¡¯s transportation with mass adoption of EVs. In 2030, India can eliminate 37 percent of its present carbon emissions simply by switching to these green vehicles in a shared and connected mobility ecosystem.

Let us compare this to the prevalent ways in which India meets its energy demands. The government estimates that India¡¯s import dependency on oil (petrol and diesel) has increased from 78.3 percent of total consumption in 2014-15 to a new high of 83.7 percent in the 10-month period of FY 2018-19.

(Representative Image: BCCL)

Transport is the primary culprit here, being the largest oil consuming sector. Within the last 10 years, the use of diesel and petrol has seen a growth of 5.9 percent and 9.9 percent respectively.

If the country was to shift to an EV ecosystem soon enough, the CII estimates a reduction of whopping 156 million tonnes of oil equivalent in diesel and petrol consumption in 2030. In monetary terms, this would save India approximately USD 60 billion in 2030 at the current oil prices. That is equivalent to Rs 4159,000,000,000 or Rs 4 lakh 15 thousand crore. Keep in mind that the oil prices will only go up, meaning this is the least savings that the country will make as per present estimates.

This is in line with the nation¡¯s current aim of reducing its oil imports by 10 percent by 2022. So as the next phases of the FAME scheme unfold and if the supplementary measures as suggested by CII are implemented, India will be on its way to becoming a much greener nation while saving much of its money on its energy demands.

(With inputs from PTI)