Petrol engine was invented by Nicolaus August Otto of Germany in 1876 and Diesel engine by Rudolf Diesel in 1897.
Today, even after 150.years, the IC engine technology is still alive although with a lot of cosmetic upgrades such as Euro-1/2/3/4/5/6… & so on. Can we think of life without Automobiles ?
Even today , when we are talking of Bio fuel , Ethanol, Green Methanol , Ammonia , Bio-diesel , CNG, Green Hydrogen, the IC Engine would still continue to be there for years to come, the world owes to the inventors.
However, these Gas guzzlers with diesel petrol as fuel are the the main source of air pollution with toxic exhaust gases and most importantly carbon emissions which is systematically leading to Global warming and climate change which the planet earth is facing at a rapid rate.
Now that the entire world is focussing to resolve this issue, IEA says - World at
"begining of end " of fossil fuel era.
But India has another issue at hand - we had to import 87% of our crude requirement in 2022-23 of 232 MMT worth 16 Lakh crore. our indigenous production was a miniscule 28MT- we just meet 13% of our requirement.
Similarly , we had to import 50% of our CNG / LNG requirement in 2022-23.
India is not an oil rich country like Gulf / Russia/ USA. Two of our upstream Gas & Oil companies like ONGC and Oil India have been working on Oil & Gas exploration since last more than 60 years. The Govt has also opened Pvt Sectors for oil & Gas exploration & Reliance , BP are jointly working on exploration of Oil & Gas …recently Govt has allowed 100% FDI in Oil & Gas exploration, but the needle has moved very little.
Basically, we have been trying to squeeze dry towel to get water. So we have very little OIL & GAS.
However, Nature has been very kind to us.We are Blessed with adequate SUN light, Wind, Water, Rain and most importantly we have Vast Arable land with 169 million ha. India closely followed by the United States of America (160 million ha), China (136 million ha), the Russian Federation (123 million ha) and Brazil (64 million ha).
India is World’s most youngest & populous nation full of Human talents. We can send a rocket and land in the moon where no one has landed. Can we not make best use of what we have ?
India is the 3rd largest importer of crude in the world and the energy requirement is increasing @ 9% annually. Energy security is something which India is very much concerned with a lot of volatility of crude oil and uncertainty in supplies due to Geo- political situation and that is the reason the Govt is trying to come out with alternatives such as Ethanol, Bio gas, Bio- Diesel, Flex fuel , Green Hydrogen, EV with a view to become "Atma Nirbhar Bharat ".
With so much of noise on Biofuel, currently we are not even one among top 5 Biofuel producing nations in the world ( USA, Brazil, China, Indonesia, Germany ), though we have all the ingredients , drive ,& need to become no.1 Biofuel nation.
The recent Biofuel Global Alliance conceived by India and supported by the entire world is the right step to counter our Duel challenges of Carbon emissions and the burgeoning Import bill & energy security.
As I had done some work with Auto Industry and with reference to Auto emission, created this thread to familiarise with various options that we have in India to become Atma Nirbhar Bharat as far as Automobile fuel is concerned. We may like to identify stocks / companies which we can think of investing from medium to long term point of view.
(1) Diesel / Petrol
Pros : Familiar technology, Affordable price , easy to service , we are most comfortable with
Cons : Carbon emissions 8 to 16 times higher than CNG fuel. Highly polluting with , NOx, HC, SPM, RSPM , Climate change, Global warming,
Import dependence, forex outgo, Uncertainty in supply, price fluctuation in international market and geo political situation
(2) CNG
Pros : 8-16 times less carbon emissions than petrol diesel. clean fuel in use since 2001. Estimated 8 millions CNG vehicles of all types in Indian road includes CNG retrofitted kits.
companies involved - Maruti , Tata Motors, Leyland , Volvo Eicher, Mahindra , Bajaj 3 wheeler, Atul auto 3 wheelers - All OEM’s sell CNG models. Cummins has exclusive CNG engines for heavy vehicles. one Minda group co deals with CNG kits for OEM. CNG cylinder manufacturers.
others in the CNG business are CGD’s such as IGL, Gujarat Gas, MGL, Adani , Gail, Petronet LNG, Torrent , GAIL
CONS:
Not a renewable fuel. Import dependence.
CNG filling stations are limited to Northern & Western India- HBJ pipeline. Now pipelines are under construction in East and South India.
Heavy vehicles can run up to 500 kms Max at one fill and cars can run up to 100-200 kms …so not suitable for long journeys since refills can only be done within city limits. outside city limits , filling stations may not be there.
(3) LNG
Pros : Liquified form of CNG can be filled in cryogenic tanks for long haul drive more suitable for heavy trucks for long distance drive . Engine same as CNG. Other benefits same as CNG
Cons - Not a renewable energy. import dependency.
companies involved : same as that of CNG
(4) Bio-Ethanol-1G from Sugarcane/corn/ grains
Pros : Though Ethanol has two carbon atoms and so there is two times more carbon emissions than CNG, its carbon dioxide gets absorbed by sugar cane plants which would be grown throughout the year. so it is considered as Renewable fuel with zero carbon foot print. less pollution. India has vast agriculture land. Sugarcane farmers earn money so also sugar cane companies. No import dependency.
Atma nirbhar Bharat
Can be mixed with petrol in varying proportions. currently we are at 12% at all India level …aiming to 20% blend by 2025 and save Rs 1,00,000 crore per annum. in fact some of the filling station have already started dispensing 20% ethanol.
Cons :
Inadequate production capacities currently. Flexi fuel capability yet to be developed by OEM’s
Companies- All sugar manufacturing stocks/ Ethanol producers / Ethanol plants manufacturers such as Praj. All OMC - PSU are actively involved. All Auto OEM’s.
(5) Bio-Ethanol 2-G from crops/ vegetables biomass residues , straw , bamboo, stubble.
Pros-same as 1- G ethanol
Cons: Supply chain of feedstock and inadequate establishment / investment
Companies : Oil PSU’s like Indian oil & oil India and others are installing Bio-Ethanol 2G in their refineries.
Praj supplies 2G ethanol plant.
(6) CBG- Compressed Bio gas also known as Bio- CNG
Produced from Bio waste such as crops/ vegetable waste / residues, straw , cow dung , kitchen waste and any type of Agri waste/ Agri- Biomass.
Pros :
Same as CNG. Property of CBG same as that of CNG. But it is renewable energy. No import dependency. Atma nirbhar Bharat. Govt subsidy available under SATAT Scheme (Sustainable Alternative Towards Affordable Transportation) is an initiative by the government of India with the objective of setting up Compressed Biogas production plants, and make it available for market use for automotives.
Maruti Suzuki has entered in to agreement in Gujarat milk federation for cow dung feedstock to produce Biogas. Reliance and Adani is entering in to Bio gas business in a big way.
Praj , Thermax makes Biogas plants .
Other companies involved are same as CNG.
Cons: Eco system for Feed stock gathering / collecting / supply chain not well developed though it is estimated by Bio Gas association that India has plenty of Biomass to produce 170000 MT of CBG/ day can be produced which can meet one third of crude import or can meet the entire LNG import…
(7) LBG or Bio LNG
properties same as LNG. But Bio LNG or LBG is renewable energy. as it can be produced from BCG… no import dependency.
All other pros and cons are same as
non-renewable LNG/ CNG
(8) Flex fuel :
Brazilian flexible-fuel vehicles are optimized to run on any mix of E20-E25 gasoline and up to 100% hydrous ethanol fuel (E100). Flex vehicles in Brazil are built-in with a small gasoline reservoir for cold starting the engine when temperatures drop below 15 °C (59 °F).
Brazil Has Over 34 Million Licensed Vehicles, One of the Largest Flex-Fuel Fleets in the World.
If Brazil can do a massive sugar cane cultivation & ethanol production with just 60 million ha Land mass - why not we with 160 million ha Land ???
(9) Green hydrogen can also be produced from CBG ( Methane).
The process of production of hydrogen from CBG is same as that for hydrogen from Natural gas currently followed at Fertiliser plants.
Green hydrogen in turn can be used as ultimate Green fuel for automobiles IC engine . Fuel cell is ideal but expensive.
More on green hydrogen can be found in green hydrogen thread
(8) Green Hydrogen produced from electrolysis of water can be dispensed through hydrogen filling stations. Hydrogen cars with good old IC engine. zero carbon emissions.
For details you may please see green hydrogen thread.
Atma nirbhar Bharat.
(9) Methanol/ Bio methanol/ Green Methanol- It is the 1st.member of alcohol family with one carbon atom.
Pros : Cheapest to produce. China is the leader in the world production and as auto fuel.
it can be produced by 3 methods:
From (a)Coal
(b)From Methane,/ CNG/ CBG
(c) From CO2 and Green Hydrogen
If methanol is produced from CBG as in (b)above, it is called Bio methanol
. it is renewable energy. The method (c) is also renewable if it is green hydrogen , but expensive though…
(10) Bio Diesel : Produced from non- edible oil / burnt used oil by reaction with either Bio Methanol or Bio- ethanol.
Pros : considered renewable as non edible crops are grown which absorb CO2.
Currently : The oil PSU’s are procuring Biodiesel and mixing with diesel.
There is only one listed company named Kotyark Industries Limited which makes bio diesel. There are dozens of unlisted players out of which Emami agrotech of Emami group is worth mentioning which exports biodiesel to Europe.
pros: Atma nirbhar Bharat …no import dependency … Many transport operators / STU are already using this.
Cons: Lack of ecosystem supply chain for feedstock. so scalability is an issue.
There has to be clear govt policy on non edible crops cultivation such as Jatropha, karanajia, mahua, castor,cotton, rubber, palm etc.
(11) EV -
Pros: Zero carbon emissions at tail pipe.
Cons: Expensive ! penetration remains low.
Currently Li Battery is imported from China Korea. Govt has approved Battery PLI for 4 players - Reliance , Hyundai Global , Ola & Rajesh export. Exide and Amara Raja battery was rejected. Perhaps Govt wanted Green field project …not brown field.So both Exide & Amara Raja are going to make EV Li Battery on their own investment without PLI.
Even if these companies make batteries in India , still they have to import Li, cobalt , nickel from Argentina & Australlia.
It is not Atma nirbhar Bharat.
The Govt initiated FAME -1 subsidy in 2015 , FAME-2 in 2019. But recently Govt reduced FAME 2 subsidy and the 2-wheeler sales nosedived in July - August. Now , Govt seems to be planning for FAME-3 ! How long an industry can survive only on Govt subsidy??The OEMs should do their bit , their own research development plan to reduce cost !
Very Few individual pvt operators can buy a EV bus or truck…though EV cars/2 wheelers may be affordable to some extent.
Maruti rightly said they are not yet ready with an EV for their mass market customers at a price the customer can afford. Maruti is betting Big in CNG- currently producing 7 lakh CNG vehicles per annum.They have phased out Diesel completely. Every new model they release to the market has a CNG twin. No wonder, Suzuki Motors coming up in a big way to produce CBG- renewable form of CNG by collaboration with milk federations in Gujarat for CBG from cow dung
Alternate Battery technology to be developed and made available at cheaper rate with indigenous material to make EV affordable for Atma nirbhar Bharat.
Battery charging done through Thermal power source … so it is not carbon neutral.
However , EV can grow at its own pace.
Price approx of different Bio fuels vs diesel petrol as on date as follows . However price can still be lower if scalability and sound supply chain.
All in INR per litre
Diesel- 92
Petrol -105
CNG- 80
Bio-Ethanol- 65
CBG- 45
Methanol-20 to 40 ,(from coal)
The Govt intentions are good. But execution remains slow. Further the Govt requires quick response & support from industry, MSME’s which currently seems to be sluggish.
Request all members to keep this post updated with latest development on the topic.
Also please excuse me for any typo error. do bring to my notice any error or please do edit it.
Please do revert in case you require any clarification on any statement that I have made.
Discl: This is purely for information and education only. Not an investment recommendation for any stock / company mentioned in the post.
I may have investments in some of the stocks mentioned. please apply due diligence before investment.
Following Articles can throw some more insights.
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World at “Begining of end” of fossil fuel - says Global agency
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Global Biofuel alliance can turn india in to export hub for SAF- ,( sustainable Aviation fuel )
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With cheapest fuel India aims to become Global refuelling hub for green ships
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Nitin Gadkari threatened In SIAM meeting he would impose 20%™Additional GST on diesel vehicles, but later tweeted no plan right now.
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IBA- Indian Bio-Gas association says 500 billion USD opportunity.They can meet the entire LNG import.
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China methanol case study
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Brazil ethanol case study
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Which nation makes how much Biofuel ?
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Down to earth - one NGO headed by Sunita Narayan says all CBG, LBG, Hydrogen, methanol, should be made from biomass.
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Govt policy document on Bio fuel
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Govt policy document on 1G/2G Bio ethanol.
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Govt policy doc on CBG
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Govt policy doc on on Bio diesel
14.Govt policy doc on methanol -
Few latest news flash articles
Brazil Biofuel Case Study: Policy & Benefits | StudySmarter.
https://mopng.gov.in/en/refining/compressed-bio-gas
https://mopng.gov.in/en/refining/ethanol-blended-petrol
https://mopng.gov.in/en/refining/second-generation-ethenol