Mr. Darshan Ghodawat, CEO and Managing Director, AVA Global Logistics LLP
Amidst the urgent environmental challenges confronting the world of freight transportation, a notable transformation towards cleaner and more sustainable modes of overland freight is underway. Spearheading this pivotal shift are the remarkable advancements in electric trucking. This new era of electric trucking offers improved range, an expanding charging infrastructure, and a growing cost-effective edge for freight companies. Within this promising realm, there is not only the prospect of reduced operational costs but also the powerful potential to significantly curtail greenhouse gas emissions, thus contributing to improved air quality and a reduction in noise pollution.
India, with its fleet of over 2.8 million trucks covering more than 100 billion kilometres annually, faces a substantial challenge in addressing the environmental footprint of its logistics industry. Despite comprising just 2% of road vehicles by volume, these trucks bear the weight of over 40% of road transport emissions and fuel consumption. The research underscores the necessity of electric trucks constituting at least 8% of the total freight truck fleet by 2070 to achieve net-zero emissions.
Electric vehicles (EVs) have emerged as a clean and cost-effective alternative to traditional fossil-fuel-powered vehicles. It is a compelling proposition for overland freight, helping reduce operational costs. Large nations like India can gradually reduce their dependence on fossil fuel internal combustion engine (ICE) vehicles, thereby facilitating a sustainable transformation in their freight transport systems.
The trucking industry is on an impressive growth trajectory, marked by enhanced communication, burgeoning supply and demand, and a heightened reliance on technology. India’s road logistics market is poised for substantial expansion, projected to attain an impressive Compound Annual Growth Rate (CAGR) of 8%, propelling it toward a significant $330 billion by 2025. However, the emissions and pollution generated by trucks on Indian highways loom as a concerning issue, necessitating a shift towards more environmentally friendly alternatives.
In the Union Budget 2023-24, Finance Minister Nirmala Sitharaman earmarked Rs 350 billion for vital capital investments to achieve net-zero emissions by 2070. Moreover, the government has committed to supporting a 4,000 MWH battery storage system through the Viability Gap Fund. Notably, influential manufacturing companies and logistics service providers have voiced ambitious targets. This was evident during NITI Aayog’s e-FAST (Electric Freight Accelerator for Sustainable Transport) initiative, where the industry collectively pledged to embrace 7700 electric freight vehicles by 2030. This concerted effort underscores a shared dedication to driving the electrification of the truck market in India.
To further incentivise electric vehicle adoption, the government has introduced initiatives such as the Accelerated Adoption Scheme for Electric Vehicle Manufacturing – II (FAME – II) and the Production Linked Incentive Scheme (PLI). The budget allocation of Rs 5,172 crore (about $631 million) to the FAME-II program is anticipated to encourage and subsidise the adoption of clean-energy vehicles.
Despite these encouraging strides, the heavy logistics sector’s electrification in India has yet to gain total momentum. With over 2.8 million trucks traversing vast distances, the industry continues to impact emissions and fuel consumption significantly. An intensified effort is warranted to expedite the transition to electric trucks.
The transport sector is recognised as the swiftest-growing contributor to climate change, accounting for approximately 23% of global emissions. In India, medium and heavy-duty trucks constitute only 2% of the total vehicle population, yet they contribute 45% of overall vehicular road transport emissions. The rapid adoption of electric vehicles, especially within the medium and heavy-duty category, is paramount for India to meet its climate objectives and fulfil commitments under the Paris Agreement.
Given India’s status as the world’s third-largest truck market, trailing only China and the United States, its early embrace of zero-emission trucks can advance domestic climate goals and bolster global climate action. Deploying zero-emissions medium- and heavy-duty trucks in India is an essential stride towards a sustainable future.
The Indian Government’s e-FAST initiative, supported by shippers and logistics service providers, seeks to spearhead the adoption of at least 7,700 Zero-Emission Medium- and Heavy-Duty Vehicles (ZE MHDVs) by 2030. This collaborative endeavour underscores a collective commitment to reducing freight emissions and ushering in a new era of cleaner and more sustainable overland freight transportation.
In essence, India’s electric trucking era promises emissions reduction and cost savings and signifies a resounding commitment to a sustainable and environmentally responsible future in the logistics sector. With concerted efforts from governmental bodies, manufacturers, and logistics providers in promoting electric trucking, India is primed to lead the charge in global endeavours to mitigate the environmental impact of overland freight, setting a compelling example for the world.