Biogas can be used independently as compressed biogas (CBG), a substitute for compressed natural gas (CNG) for powering vehicles. It can also be blended with fossil fuel-based CNG. He also argued that there should always be a goods and services tax (GST) differential between hybrids and electric vehicles (EVs), with EVs continuing to attract lower taxation. He rejected demands by some original equipment manufacturers (OEMs) seeking tax parity between the two.
Bhargava was responding to the growing challenge facing the country, which has come into sharper focus because of the US-Iran conflict and the oil crisis, on how India should accelerate the shift away from heavily imported fossil fuels towards electrification.
Speaking to Business Standard, Bhargava said, “Biogas has not taken off at all in the country despite its immense potential because there is no incentivisation for companies to invest in plants that convert easily available agricultural waste into biogas. That is why vehicles using biogas should be given more incentives in GST or even concessions in proposed Corporate Average Fuel Efficiency norms than what is offered to other vehicles, such as hybrids.”
He pointed out that an earlier incentive scheme under which oil marketing companies guaranteed offtake of CBG from producers did not succeed. A new policy has now been worked out, which he described as more attractive. “Remember, unlike EVs, the process of biogas conversion also produces organic manure, which is needed for agriculture,” he added. He also said that biogas has the added advantage of generating net-zero carbon emissions.
On the push by some OEMs for GST on hybrids — such as plug-in hybrids or range-extender EVs — on par with pure battery EVs, Bhargava said, “There should always be a differential in GST between electric and hybrids. EVs should always have lower GST, even though they may not effectively ensure zero emissions, as charging stations get electricity from coal-powered units. GST on hybrids should be higher than on EVs, but lower than on petrol and diesel vehicles, which are most polluting.”
On the government’s decision to notify higher ethanol-petrol blends of E30 — containing 30 per cent ethanol and 70 per cent petrol, compared to the earlier E20 blend (20 per cent ethanol and 80 per cent petrol) — Bhargava said, “We have the technology to move to E30 from E20, and it will help reduce emissions.”
However, he pointed out that existing vehicles designed for a 20 per cent ethanol blend can use E30 without any deterioration in vehicle performance. He, however, ruled out the large-scale potential of flex-fuel vehicles, despite many companies demonstrating their commercial viability. In flex-fuel vehicles, ethanol blending can rise to between 85 per cent and 100 per cent. Several automobile companies have already showcased such vehicles.
But Bhargava said, “The problem is that there is not enough ethanol available from processing sugarcane, maize, and other
feedstock. Such high levels of ethanol blending would require very large volumes.”
