Alternate Powertrain Options and their Status in India • EVreporter

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Alternate Powertrain Options and their Status in India • EVreporter


To design India’s future transport ecosystem, the government is exploring and putting various alternative fuels on the roadmap. Preetesh Singh – Manager at Nomura Research Institute, discusses the current status of alternative powertrain technologies in India.

Need for alternate powertrains in India

The transport sector accounts for 40% of India’s oil consumption, a large part of which is imported. The import bill of raw materials and components for manufacturing vehicles stood at USD 15.4 Bn, i.e. 31% of the country’s total imports. The sector is also responsible for 10% of CO2 emissions in India. There is an immense need to holistically explore alternate powertrains from the perspective of Energy Security, Import Dependency and Carbon Emissions.

Alternate powertrain options in India

The impetus towards electric vehicles will address the oil imports. Still, the issues of raw material/component import dependency and carbon emissions persist as most of our power generation is from fossil fuel sources. There is a need to continuously localise the EV supply chain to unfold the full benefits of the shift to e-mobility.

There are multiple alternate powertrain options such as Ethanol, Flex fuel, Methanol, Biodiesel, Hydrogen, Ammonia.

Today, an average ICE based passenger vehicle in India uses imported components worth ~INR 0.98 lakh and imported fuel worth ~INR 2.97 lakh over its lifetime, i.e. 15 years, with an average run of 12,000 Kms per year. This leads to a total import cost burden of ~INR 3.95 lakh per vehicle. Alternate fuels like Ethanol and CNG use similar ICE engines. While the manufacturing import cost remains roughly equal, there are substantial savings on fuel imports as these are primarily procured domestically.

Ethanol has a lot of potential as a biofuel. Flex-fuel engines are also being pushed by the Government, especially where Ethanol supply is in surplus. The attention towards Methanol is low as 90% of the methanol used in India is imported. For Hydrogen, the demand is foreseen to be mature post-2030.

Ethanol and flex fuels

Bioethanol is a liquid biofuel made from the fermentation of several feedstocks, including corn, maize, molasses, and, more recently, microalgae. It is one of the most promising alternative fuels which can be implemented in the short run. It can simultaneously tackle myriad national challenges such as reducing CO2 emissions, reducing crude oil dependency and import costs, increasing farmer income, generating employment in rural areas, and helping the sugar industry generate additional revenue, among many others.

The government has set 20% blending targets by 2025.

According to the Biofuels Policy of 2018, the Government had set a target to achieve E20 (20% Ethanol) for petrol, E5 (5% Ethanol) for diesel by 2030 and also to focus on 2G (2nd Generation) Ethanol technology specifically to avoid a possible conflict of fuel production and food security. Later in 2020, the target year for achieving 20% Ethanol blending in petrol was advanced to 2025 by Cabinet Committee on Economic Affairs. The government has set 20% blending targets (for ICE vehicles) by 2025.

At present, India has achieved ~8.5% Ethanol blending thanks to several interventions by the Government. Initiatives such as the interest subvention scheme, approval to utilise surplus rice stock from ‘Food Corporation of India’, and permitting additional sources for Ethanol production have boosted Bioethanol consumption.

Regarding Bioethanol supply, it is anticipated that ~13.5 Bn litre supply of Bioethanol (with a split of ~55% from sugar and ~45% from grain-based sources) will be required to meet the E20 target in FY26. The current total Bioethanol production (2021) stands at 5.9 Bn litres. Accordingly, 7.2 Bn litres of additional capacity needs to be installed to meet the capacity target of 15 Bn litres.

Various OMCs (Oil Marketing Companies) have started gearing up for the capacity installation. IOCL is setting up a 100 KLPD Lignocellulose based 2G ethanol plant at Panipat, while HPCL is setting up a 2G plant in Punjab. OMCs are optimistic about meeting the capacity targets with the help of Government assistance. However, setting up new 2G ethanol production plants incurs high capital expenses, and the Bioethanol industry will continue relying heavily on 1G Bioethanol production.

Vehicle compatibility

The vehicle material and engine are currently E5 and E10 compliant, respectively. The government’s recommendation is to achieve E20 material compliance by FY2023 and E20 Engine tuning by FY2025. OEMs will have to change the material of moving parts to make it E20 compliant, and it is claimed that these parts can be manufactured in India with ease. Changes concerning the manufacturing process and assembly line are proposed to be minimal. To make these changes in the vehicle, an additional average cost increase of INR 2000 for two-wheelers and INR 5000 for four-wheelers can be expected.

The government wants to take it a step further and implement flex-fuel engines in India. OEMs have been advised to introduce flex-fuel engines.  A clearer plan on flex fuels is awaited; however, ethanol supplies may be a stumbling block to widespread use.


Hydrogen has traditionally been utilised as raw material and finds utility in oil refining, fertiliser, methanol production, and other industrial processes. With numerous developments, Hydrogen has started finding applications across the industrial, transport and power sectors. The Government of India plans to target different sectors across phases to facilitate large-scale Green Hydrogen consumption, starting with scaling the use of Hydrogen in the Refining and Fertiliser industry and then further unlocking sectors such as automotive and power. Hydrogen can be used directly in IC Engines in the form of a blended mixture with fossil fuels or in the hydrogen fuel cells to generate electricity.

In the near term, blending with CNG is seen as a more viable solution, given the high cost of transporting and distributing only Hydrogen.

Battery electric vehicles (BEVs) are expected to dominate most of the smaller, shorter-range passenger vehicles, including 2Ws, 3Ws, 4Ws, city buses and last-mile freight in the coming decade. However, Hydrogen Fuel Cell Vehicles (FCEVs) may be competitive in long-distance, heavy-duty vehicle segments such as trucks. Even in these segments, the eventual winner between BEVs and FCEVs is not clear yet, as technologies are evolving rapidly.

Hydrogen FCEVs could be competitive in these areas due to faster refuelling times and similar operations as diesel equivalents. The competitiveness of Hydrogen FCEVs is also dependent on robust cost declines in multiple technologies and distribution costs of Hydrogen. Given the limited market share of Hydrogen Fuel Cell Vehicles, the per-unit costs of the requisite infrastructure risk are high. Supporting infrastructure development and optimisation to keep costs low appears to be a crucial task for future policy.

The Government of India recently launched a Green Hydrogen policy to facilitate the transition from fossil fuel to Green Hydrogen.

Some of the key features of the policy include:

  • waiver of inter-state transmission charges for a period of 25 years
  • approval in 15 days for open access for sourcing renewable energy
  • land in renewable energy parks
  • land and permission to set up bunkers near ports
  • support from distribution licensee in procurement and supply of renewable energy to the producers of green energy.

Additionally, the Ministry of New and Renewable Energy (MNRE) will establish a single portal for all statutory clearances and permissions required for manufacture, transportation, storage and distribution of Green Hydrogen. The concerned authorities will be encouraged to give all the clearances and approvals in a time-bound manner and preferably within 30 days from the date of application. Also, to achieve competitive rates, MNRE may aggregate demand from different sectors and conduct consolidated bids for the procurement of Green Hydrogen. All these steps will encourage energy as well as non-energy companies to enter into the business of Green Hydrogen.

Thanks to Shravan Bhanot – Senior consultant, Jivesh Madan – Senior Associate Consultant and Sayan Das – Senior Associate Consultant at Nomura Research Institute for extensive contribution towards this analysis.

This article was originally published in EVReporter March 2022 Magazine that can be accessed here.

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