Amid growing concerns over India’s dependence on imported fossil fuels, Maruti Suzuki Chairman RC Bhargava has called for stronger government incentives for vehicles powered by biogas, saying they offer greater environmental benefits than hybrid vehicles.
Speaking about the country’s transition towards cleaner fuels, Bhargava said vehicles running on compressed biogas (CBG) should receive more support through lower Goods and Services Tax (GST) rates and Average Fuel Efficiency norms because biogas ensures net-zero carbon emissions and also produces organic manure useful for agriculture, Business Standard reported.
CBG can be used as an alternative to compressed natural gas (CNG) for vehicles and can also be blended with conventional CNG.
“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,” Bhargava said.
He added that an earlier arrangement under which oil marketing companies guaranteed purchase of CBG from producers did not deliver the expected results. However, he said a new policy framework has now been developed and described it as more attractive for investors.
Bhargava also stressed that electric vehicles should continue to enjoy lower GST rates than hybrid vehicles. Rejecting demands from some automobile manufacturers seeking equal tax treatment for hybrids and EVs, he said hybrids should be taxed lower than petrol and diesel vehicles but higher than electric vehicles.
“There should always be a differential in GST between electric and hybrids. EVs should have lower GST,” he said, while also noting that electricity used for EV charging often comes from coal-based power generation.
On the government’s move towards higher ethanol blending in fuel, Bhargava said the company already has technology capable of supporting E30 fuel blends, which contain 30 percent ethanol and 70 percent petrol.
“We have the technology to move to E30 from E20, and it will help reduce emissions,” he said.
He noted that vehicles designed for E20 fuel can also use E30 without affecting vehicle performance.
At the same time, Bhargava expressed doubts about the large-scale feasibility of flex-fuel vehicles, which can run on ethanol blends ranging from 85 percent to 100 percent. While several automobile companies have showcased such vehicles, he said India currently lacks sufficient ethanol production capacity.
According to Bhargava, producing enough ethanol for very high blending levels would require significantly larger volumes of feedstock such as sugarcane, maize and other agricultural crops.
