BPCL, MbPA to Launch India’s First Green Fuel Ecosystem

The Mumbai Port Authority and Bharat Petroleum Corporation Limited (BPCL) are establishing India’s first green fuel ecosystem.

BPCL, the Mumbai Port Authority (MbPA) and the Mumbai Port Sustainability Foundation (MPSF) have inked a MoU to improve sustainable energy options at the port.

BPCL and MbPA will collaborate to set up electric vehicle (EV) charging stations at the Mumbai Port as part of this project. The MoU also explores the possibility of converting diesel-powered ships to cleaner fuel vessels, thus boosting the port’s environmentally friendly infrastructure and lowering its carbon footprint.

The agreement also covers waste management, with BPCL and MPSF working together to develop systems for Mumbai Port’s solid waste handling, storage, and segregation of recyclable and non-recyclable materials.

The initiative, which focuses on green fuel innovations, aims to significantly reduce greenhouse gas emissions to support the country’s climate objectives, the companies said in a press release.

“BPCL, MbPA, and MPSF are dedicated to pioneering sustainable practices that align with India’s commitment to environmental stewardship,” the companies said.

Signatories:

The agreement was signed in the presence of G Krishnakumar, Chairman and Managing Director BPCL; Rahul Tandon, Business Head (I&C), BPCL; and Rajiv Jalota, Chairperson, Mumbai Port Authority.

Mr Kumar, said that the MoU aligns with BPCL’s commitment to a sustainable future, as well as its goal of reaching net-zero emissions for Scope 1 and Scope 2 by 2040.

“Enabling sustainable energy solutions like LNG and EV for the maritime sector is part of our endeavour to demonstrate social responsibility and partnering for our sustainable growth with that of the communities we serve,” he said.

Mr Tandon said, “This collaboration reflects our commitment to driving innovation in fuel solutions that not only reduce carbon emissions but also create long-term value for the environment and the industry.”

“This collaboration exemplifies the use of innovative technologies and solutions to drive research and development in the energy sector. BPCL’s leadership in this space reinforces its role in shaping India’s sustainable future, making Mumbai Port a model of environmental responsibility for ports nationwide,” BPCL said in the press statement.

The Indian electric vehicle market or EV is projected to grow by 26.4% annually, reaching a total value of $2.5 billion by 2024.

The India Electric Vehicle and Charging Infrastructure Market Databook predicts a 30% CAGR in electric vehicle adoption from 2024-2028, reaching $7.2 billion by 2028, as per a ResearchAndMarkets report.

Growth drivers:

The sector is expected to experience significant investment growth in the medium term due to the rapidly expanding competitive landscape.

Innovative start-ups raising venture capital and private equity to expand distribution and launch new products will be the main growth drivers.

EV start-ups are launching funding rounds to invest in research and development, as well as expand their distribution network.

Funding trends:

River, an electric vehicle start-up based in Bengaluru, secured $40 million in a Series B funding round in February 2024.

Yamaha Motor led the Series B round, with Al-Futtaim Automotive, Toyota Ventures, Lower carbon Capital, and Maniv Mobility as current investors. The company plans to utilize the funding infusion to enhance its Indian distribution and service network, while also allocating a portion of its earnings to research and development.

Ola Electric secured $50 million from EvolutionX Debt Capital for a lithium-ion cell plant in Tamil Nadu. It plans to raise $660 million and spend Rs 16 billion on R&D before public offering.

Zypp Electric raised $15 million in a Series C round in May 2024, aiming to expand its fleet from 21,000 to 200,000 e-scooters in 15 Indian cities by 2025, potentially influencing the market’s competitive landscape.

Tata Motors paving the way?

Tata Motors’ TPEM division led the Indian passenger electric vehicle market, registering a 48% increase in FY 2024, accounting for 13% of the company’s total volume.

The company plans to invest between Rs 160 billion and Rs 180 billion in its electric vehicle division by FY 2030, aiming for 30% of its total volume.

The company plans to introduce ten new electric vehicles by FY 2030, including the Harrier EV and the Tata Curvv mid-size, to boost its market share and promote electric vehicles, including the Harrier EV.

TPEM plans to expand its retail channel in 50 Indian cities and strengthen charging infrastructure with partnerships with Hindustan Petroleum, Shell, and Bharat Petroleum, aiming for 100,000 charging points by FY 2030.

Global EV manufacturers setting shop in India:

Global EV makers plan to establish EV plants in India by 2024, aiming to capitalize on the Indian market’s strong growth potential over the next five years.

On the other hand, the government mandates Indian companies to manufacture before selling to customers, thereby facilitating their entry into the Indian market.

Vietnam-based VinFast plans to build an electric vehicle plant in Tamil Nadu, with an initial investment of US$500 million, with a production capacity of 150,000 cars annually.

Tesla plans to enter the Indian market, investing in a manufacturing facility over the medium term, as the government encourages manufacturing in the country.

According to Motor Intelligence, the size of the Indian electric vehicle (EV) market is projected to be $34.8 billion in 2024 and is anticipated to grow at a compound annual growth rate (CAGR) of 22.92% to reach $120 billion by 2030.

Based on speed, the market is divided into three segments, according to Custom Market Insights: less than 100 mph, 100 to 125 mph, and more than 125 mph. With a market share of 45% in 2022, less than 100 mph dominated the market and is predicted to continue to do so throughout the forecast period of 2024–2032, significantly influencing the EV market.

EVs have a bright future in India:

India’s EV sales are still quite low, the report notes. China’s market may have reached a certain level of maturity, but the elimination or reduction of some subsidies in China, Europe, and India has hurt the country’s chances of making more sales in the future.

All these factors, including new emissions regulations like those proposed by the US Environmental Protection Agency, a resurgence of interest in the commercial fleet market, and recent price reductions for many EV models, should continue to drive growth.

Moreover, targeted legislative incentives are providing the growth impetus.

So, what is changing in India?

EV sales will be able to continue growing at their current rates, especially in Europe. However, it seems that things are going differently in Developing economies and emerging markets (EMDEs). For instance, companies like Exicom in India are starting to look to the capital markets to finance their expansion into electric vehicles. Announcements of new capital projects and increased capacity for battery production are positive indicators for the global industry.

Concessional financing has aided in the development of mass transit public transportation in EMDE areas. Examples of these projects include Senegal’s all-electric Bus Rapid Transit system, which is partially funded by the World Bank, and India’s deployment of 50,000 electric buses along with charging infrastructure.

By 2030, India wants to sell 30% of its cars as electric vehicles. The Indian government has introduced various schemes, including grants and subsidies, to stimulate the development of alternative fuel infrastructure and spur the expansion of charging stations. Two of these stand out:

i. Duty Reduction for EV Imports: Under the new regulations, vehicles with a minimum CIF value of $35,000 and above will only pay 15% of customs duty. The program will be in effect for five years, provided the manufacturer establishes domestic facilities within three years of going on sale.

ii. After the successful launch of FAME 2, the Indian government is expected to unveil the Rs 10,000 crore FAME 3 scheme within the first 100 days of its tenure. The program will be similar to FAME 2, which came to an end in March 2024, and will offer financial incentives for government-owned buses, three-wheelers, and electric two-wheelers.

The global scenario:

A new World Energy Investment report states that because of the recent drop in battery prices and the ongoing price wars among EV manufacturers as they fight for market share, the transportation industry may grow even slower than in the past.

EV sales in certain significant EMDE are poised to soar due to the arrival of Chinese manufacturers in Latin America and the expansion of the EV industry in India. Policies like the US Inflation Reduction Act and Europe’s Carbon Border Adjustment Mechanism that aim to onshoring manufacturing capacity should lead to an increase in spending on EV production outside of China.

Every conversation in Mumbai now revolves around the prolonged summer, delayed monsoon, and water scarcity. The list does not stop here. Escalating temperatures over the past few years, and the intensifying heat with each passing day add to the woes.

I find myself joining the chorus, albeit with a slightly different perspective. I would like to draw your attention to the pattern of electricity consumption.

Now, before anyone reaches for their metaphorical daggers in defence, I agree that our per capita electricity consumption is considerably lower than that of our global counterparts. There is certainly room for improvement, and it is expected that the numbers can/will double sooner than later.

I would like to emphasise that my observations are solely based on my personal consumption patterns and are not drawn from any external sources. Over the past few years, I have noticed a considerable jump in my electricity usage. Allow me to provide an example for better understanding. In 2013, my monthly consumption stood at approximately 120 units. By 2017, it had risen to over 250 units, and now, in 2023, it exceeds 600 units. I wonder why, the number of electrical appliances remained the same, on the contrary, it was replaced with more energy efficient ones. The number of ACs has gone up by 1 more unit. I personally believe this increase is not solely attributed to the addition of an extra air conditioner.

Can somebody explain the reason for this noticeable increase in my electricity consumption?

I believe that the impact of climate change has compelled us to run fans round the clock, resulting in higher energy usage. Additionally, household air conditioners, which used to operate for an average of 12 hours per day, now run for around 20 hours. Now what is worrying me is, as we further embrace electric vehicles, consumption is likely to escalate even more. I must mention that I am a strong advocate of electric vehicle adoption in India.

It is evident that the root cause is the visible impact of climate change. The question then becomes: how can we effectively tackle this issue? For many, being part of the climate mitigation plan is in vogue, but are we truly doing enough? Are there sufficient narratives in place to create the necessary awareness? It is crucial that we collectively take steps towards addressing this challenge and not lose sight of the difficulties we face during the summer season once the monsoon arrives.

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BPCL, MbPA to Launch India’s First Green Fuel Ecosystem
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