India’s GDP is projected to reach US$26 trillion by FY48, up from US$3 trillion in FY2024, driven by sustainable economic growth as the country aims to become a net-zero carbon emitter by 2070. Achieving this goal requires addressing emissions from the transport sector. The latest EY-Parthenon report, ‘Building India’s Future: Opportunities in Green Mobility and Logistics,’ explores green mobility solutions, including electric two-wheelers, three-wheelers, four-wheelers, electric buses, LNG trucks, and sustainable warehouses. The report emphasizes key business models, government support, and the private sector’s role.
Kiran Malla, Partner at EY-Parthenon, stated, “Government initiatives like Gati Shakti, Maritime Vision, and the National Logistics Policy are improving logistics efficiency nationwide. The focus must now shift to sustainable mobility and logistics to reduce emissions and combat pollution. Alternatives such as EVs, e-buses, and LNG trucks have already reached cost parity with legacy options, providing a solid foundation for greater adoption.
As the EY-Parthenon report highlights, India’s share of global emissions was about 7.4% of CO2 emissions from combustible fuels in 2022 and it is the third largest CO2 emitting country. As per the current estimates, emissions from freight movement stood at 6.6 MtCO2 in 2020. To align with the net zero target, these emissions need to be reduced to 5.1 MtCO2 by 2030, which equates to a reduction of approximately 30% from the 2020 levels. Many regions around the world have successfully implemented green mobility solutions for a cleaner environment and India’s focus should now shift to sustainable mobility and logistics to decrease emissions and address the increasing pollution.
Government’s role in accelerating adoption of green solutions: EVs, E-Buses, LNG Trucks, and Green Warehousing:
The Government of India (GoI) is playing a pivotal role in advancing the EV ecosystem through robust policies and initiatives. The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme has significantly boosted EV adoption. Additionally, the PM e-Drive scheme, with a ₹2,000 crore allocation, aims to deploy 72,300 public charging stations (PCS) by FY30. The GoI is also offering over US$8 billion in subsidies and grants to accelerate the adoption of e-buses across the country.
States like Karnataka, Andhra Pradesh, Telangana, and Kerala are aiming for 100% electric bus fleets by 2030, with a target of 90,000 e-buses nationwide. The gross cost contract (GCC) model has been popular among State Transport Undertakings (STUs), ensuring revenue and tenure security for service providers.
India also aims to convert 33% of its long-distance, heavy-duty trucks to liquefied natural gas (LNG) in the coming years. Major carbon-emission industries such as cement, steel, FMCG, and metal are adopting green fleets to reduce Scope 3 emissions, pushing demand for LNG vehicles. LNG offers a 24% reduction in emissions compared to diesel trucks, due to lower carbon-intensive processing and more efficient energy production. The GoI’s initiative to standardize LNG pricing and propose tax breaks will accelerate LNG adoption in the heavy-duty trucking sector.
Renewable energy adoption in warehousing is driven by both cost benefits and sustainability goals. State policies such as Tamil Nadu’s Industrial Policy (2021), Uttar Pradesh’s Warehousing and Logistics Policy (2022), and Haryana’s tax incentives for green warehouses further support this shift.
The Road Ahead:
India’s rapidly growing EV industry holds over US$200 billion in investment potential by 2030, spanning electric vehicles, charging infrastructure, and batteries. This growth will also create opportunities in related industries, including alternative fuels and green logistics. As energy demand rises, investments in these sectors are expected to increase, alongside global players setting up manufacturing units and LNG stations in India to support LNG fleet growth.
The rise in global climate change initiatives has led to the emergence of carbon markets as a dynamic sector within the green economy. The Energy Conservation (Amendment) Bill, 2022, introduced the carbon credit market in India, providing opportunities for green mobility players to capitalize on carbon credits through mechanisms like Voluntary Emissions Reduction (VER) and International Renewable Energy Certificates (I-REC).
Looking ahead to 2050, India envisions a future where sustainable solutions are widely adopted, including 100% electric bus fleets, a ninefold increase in electric four-wheel sales, two million public charging points, over 1,000 LNG fuel stations, 35% LNG truck penetration, and widespread green warehouses—all contributing to reduced Scope 3 carbon emissions.
