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Incentivize vehicle conversions to clean gaseous fuels

Incentivize vehicle conversions to clean gaseous fuels 1

Ahead of Budget 2021, apex body of Auto LPG stakeholders in India has sought an active intervention from the government to incentivize consumers to convert their in-use vehicles to clean gaseous fuels such as Auto LPG.The body has once again requested for slashing GST on conversion kits along with subsidy support like that available for Electric variants to consumers shifting to environment friendly fuels.

Incentivizing personal vehicle users to shift to clean gaseous fuels at a mass level can have significant air quality benefits apart from boosting the clean transport fuel industry.

Indian Auto LPG Coalition has long held that the prohibitive GST rate of 28% on vehicle conversion kits does not sync with the government’s commitment towards clean energy, particularly at a time when Indian cities are dangerously choking due to hazardous tailpipe emissions.

“While the government has certainly shown a strong commitment to build India’s renewable energy capacity and turn to clean energy sources such as Electric Vehicles, its record on supporting low hanging environment friendly alternative fuels such as Auto LPG could have been so much better.Not only is Auto LPG taxed at 18% GST, conversion kits for Auto LPG/CNG are taxed at a prohibitive 28%. The government must reverse this policy of penalizing clean alternative fuels and announce GST cuts on both Auto LPG and its conversion kits this budget,” said Mr. Suyash Gupta, Director General, Indian Auto LPG Coalition.

A readily available and clean alternative fuel, Auto LPG can help us achieve significant gain in air quality in a short span of time.  What we need is a clear policy tilt towards clean alternative fuels and a plan to incentivize vehicle conversions to Auto LPG. Most Petrol Vehicles including cars, two-wheelers and three wheelers can easily be converted to Auto LPG or CNG by installing kits. Conversion kits that currently cost up to Rs 25,000 can be made significantly more affordable with GST cuts and subsidy support. Given the fact that Auto LPG is almost 40% cheaper than petrol, the investment cost is easily recovered within a few months.

“There is a large untapped market for vehicle conversions in India. A large number of consumers are actively looking to switch to cleaner fuels as well as cheaper alternatives to petrol and diesel. Unfortunately, lack of a proactive government policy has not helped matters. Lack of positive government messaging for clean fuels like Auto LPG, complete focus on EVs and absence of policy support prevents a large number of ready consumers from switching their vehicles to clean energy fuels. A positive messaging along with GST cuts and subsidy support for conversion kits can go a long way in inducing a mass shift to clean transport fuels,” added Mr. Gupta.

Auto LPG is the third most widely used automotive fuel used globally after petrol and diesel. It has almost 50% lesser PM emissions than CNG and Petrol and 80% lower PM emissions than Diesel. Vehicles using Auto LPG as fuel also emits much lower CO2, making Auto LPG one of the most eco-friendly fuels available today. Several governments across the world have adopted aggressive policies to encourage consumers to switch to Auto LPG, thereby making significant environment gains. It is interesting to note that while countries like South Korea consume almost 4 million of Auto LPG annually, Indian consumption is languishing at 10 % of that, being just about 0.4 million tonnes.

Tailpipe emissions from petrol/diesel vehicles are a major source of hazardous environmental pollutants emanating from the transport sector. At the same time, rising petrol/diesel prices have in recent months been a major irritant for consumers. Auto LPG is not only environment-friendly, but has also been almost 40% cheaper than petrol consistently. The government must therefore provide a policy climate conducive to the rise and uptake of clean gaseous fuels.

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