Non-Renewable Natural resources are only going to last humanity for a limited period. Recognizing this fact, the India signed the Paris climate agreement with 170 other countries in 2015. Beyond the concern of running out of natural resources, it was a significant step taken globally to combat the rising dangers of global warming. At the Paris Climate Conference 2021 (COP21), India pledged 33-35 percent reduction in its carbon footprint by 2030, which has encouraged efforts in achieving a decision that has many efforts in that direction.(1)
The encouragement given and incentives offered to the manufacture and use of Electric Vehicles (EVs) is one of those efforts that the government has identified to succeed in the coming years. It is estimated that globally electric cars will outsell the Internal Combustion Engine by 2040 thereby capturing 50-60% of all sales according to a Bloomberg NEF Report.(2) The transportation sector being the largest user of fossil fuel oil in the country, India also assured a 40 percent increase in non-fossil fuel dependent vehicles.(3) Our country also committed to the Sustainable Development Goals (SDG) Target 11.2 to provide access to safe & affordable transport systems that are also environmentally sustainable. As far as EVs go, we are all set to move into the future.
In light of the challenges, the government is now using a two-pronged approach to give a much-needed push to the EV industry:
i) policies related to boosting the charging infrastructure across the country, and
ii) policies and rules pertaining to finding substitutes for and e-waste management of lithium batteries
F.A.M.E. I & II
To stimulate the market for EVs, Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles’ (FAME) Policy was launched by the Indian government in two phases.
FAME – I provided subsidies and grants as well as financial support for research & development, and infrastructure.
FAME – II was implemented to provide a stimulus to demand incentives (for consumers & end users such as upfront reduced purchase prices), establishment of a network of charging stations, administration of the scheme including publicity, IEC (Information, Education, Communication) activities. To provide an impetus to India’s SDG commitment, and intensify implementation of the legislations in place, Phase II of the FAME scheme has been extended for a period of two years i.e., up to 31st March 2024.
With FAME, the market would open up for de-licensed charging infrastructure business and lead to various financial incentives to reduce upfront cost of EVs and charging infrastructure along with creating the perfect environment for EV development. (4)
Modifications & transformations through incentives
E-Waste Management
In 2020, the Ministry of Environment came out with draft rules for Battery Waste Management. These rules propose to deal with responsibilities of manufacturer, importer, assembler and re-conditioner regarding prohibitions and labelling requirements as far as limits on heavy metal content is concerned.(5) The Govt. also approved a proposal for implementation of a Production Linked Incentive (PLI) Scheme ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ to promote domestic manufacturing of ACCs that can store electric energy either as electrochemical or as chemical energy and convert it back to electric energy as and when required.(6) Manufacturers that achieve 60% value added within the stipulated period of time of project commencement will be eligible for the subsidy.
Phased Manufacturing Program (PMP) has been started to promote indigenous manufacturing of EVs and their assemblies/ parts. After this 2021 notification, customs duty on EVs imported in SKD (Semi Knocked Down) and CKD (Completely Knocked Down) conditions, Lithium-Ion Cells, and other accessories have been increased.(7)
Model Building Bylaws
The Ministry of Housing and Urban Affairs (MoHUA) amended the Model Building Bylaws, 2016 and the Urban and Regional Development Plans Formulation and Implementation Guidelines, 2014 (URDPFI) to include provisions for EV charging (MoHUA’s suggested amendments to the building bylaws asking for charging infrastructure to be provided at 20% of parking spaces for all new buildings).
Energy Efficiency Services Limited (EESL) and public charging
To standardise charging infrastructure in India, the government has proposed that EESL should be designated for bulk procurement of public chargers, and other entities function as nodal agencies responsible for setting up and maintaining them using a capital grant by the Central government, which is available under FAME-II. Relevant agencies including the Central Electricity Authority, shall provide the necessary support to the nodal agency. State governments shall nominate DISCOM as the nodal agency for the state government for setting up the charging infrastructure. Implementation agency will function as an aggregator between the central and state nodal agency. The implementation agency shall be responsible for the installation, operation, and maintenance of public charging stations/fast charging stations.
Through the looking glass of policies
While India is still in the initial phase of adopting EVs as the principal means of vehicular population there is a huge awakening in the country towards this process Thus, all major automobile players actively working on Electric Vehicles for the last several years are optimistic about higher penetration in the market in the coming years. Since progress in this regard has been steady even if it has been slow.
Source: financialexpress.com
