LNG trucking needs a fiscal shot in the arm
Without government incentives, India's ambition to convert one-third of its 7.5m diesel-fired heavy-duty trucks, lorries and long-distance buses to LNG in the next seven years will remain a distant dream.
That's the view of several industry sources responding to the government's Scheme for (the) Promotion of LNG-based Mobility, announced on September 3 (2024). This scheme calls for LNG to replace diesel in about a third of India's old long-haul heavy-duty trucks and one-third of new heavy-duty vehicles.
By March 31 (2020), India had registered 5.8m trucks and lorries and 1.6m multi-axle vehicles. "We have to learn from steps other countries have taken to promote LNG-fired heavy-duty vehicles," says a GAIL source.
"We have to cut duties and taxation on LNG trucks and LNG as fuel." He adds India also needs to introduce a uniform taxation policy, allow an exemption for LNG trucks from toll tax and motivate truckers to switch to LNG."
Our source cites several European countries taking steps to promote LNG trucks and buses. "These steps are yielding significant results," he continues.
He adds that Spain is granting an ECO label to vehicles running on CNG/LNG with lower taxes, free parking, toll tax exemption and preferential right of way on highways. In the Netherlands, 15 municipalities have set up low-emission zones where vehicles using fuel other than diesel are allowed access, where only LNG trucks can distribute inner city goods, even in the early morning.
Italy has directed all public bodies replacing their fleets to buy at least 25% of new vehicles powered by CNG, LNG or electric motors. In 2017-18, China banned heavy-duty diesel vehicles in the Beijing-Tianjin-Hebei region in favour of LNG vehicles.
India's NITI Aayog (formerly the Planning Commission) and the Netherlands government published a joint report in January 2024 which says there are over 580,000 LNG heavy-duty vehicles globally, of which China accounts for almost 99%; China has 4800 LNG stations. "China is spearheading LNG use in transportation globally," says the report.