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Modi Sarkar, since assuming office barely two days ago, has announced a series of initiatives from its election manifesto. After a decade of lethargy, it is a pleasant change to see the new Indian government working at a brisk pace. While the sense of purpose is appreciated, the proposal by the Minister for Transport, Highways, and Shipping, Nitin Gadkari, to introduce ethanol into India’s petrol is worrisome.

Ethanol is an alcohol fuel that is added to petrol in some countries to lower cost to the consumer, reduce consumption of oil, and lessen the environmental impact of transportation. Mixed fuels are rated by the amount of ethanol contained; for example, common blends are E10, which contains 10% ethanol, and E15, which contains 15% alcohol. Another common blend is E85, also known as flex fuel, in which the ethanol ranges from 51% in winters to 83% in summers.

Ethanol blends do not affect performance of the vehicle in terms of torque or horsepower but they do lower the mileage of the vehicle up to 25%. This is because ethanol has lower energy content than petrol; a higher blend therefore means lower mileage. It is possible for ethanol blends to be cheaper per litre but costlier per kilometre. Ethanol is also more corrosive on the car’s engine.

Maize is the most common source of ethanol in the United States and sugarcane in Brazil, who, between them, are responsible for almost 90% of the world’s production of ethanol. Other sources such as agricultural feedstock, sugar beet, switchgrass, potatoes, cassava, barley, and sunflower are also available but require more processing. The energy balance – the difference between the energy ethanol gives and the energy required to produce ethanol – for maize ethanol is marginally positive but the data is controversial.

In addition, though ethanol reduces air particulate pollution, its production results in fairly high greenhouse gas emissions and negates any the environmental benefit of the shift from fossil fuel. Although the figures are still being debated, several studies have indicated that ethanol might release more GHG over its total lifecycle than petrol by two and a half times.

The biggest concern with the addition of ethanol to India’s fuel supply is that it will take up scarce land set aside for grazing and other crops to grow fuel. With the demand likely to be huge, there is bound to be a shift in land use from food crops to fuel crops. Agriculture will become even more intensive. Without adequate reforms and education in the agricultural sector to increase productivity, the shift to fuel crops will result in food price inflation. The savings from reduced oil imports will be spent instead on subsidies and and higher food prices.

Proponents of ethanol argue, however, that the Brazilian model of ethanol from sugarcane is significantly superior to the US model. They are right; in terms of energy balance as well as GHG emissions, sugarcane-based ethanol has proven superior to maize-based ethanol. However, it does not solve the problem of land use. Additionally, if only the by-product of the sugar and alcohol industry were to be directed towards fuel manufacture, the industry would not be able to grow with demand in the automotive industry. Ultimately, ethanol derived in such a manner is only a small substitute and not a permanent solution to oil dependency.

Despite the questionable benefits of ethanol-blended petrol, both the United States and Brazil support their ethanol habit with enormous government subsidies to the sector.

While ethanol is not the answer, Gadkari’s initiative to reduce India’s energy import bill and have cleaner air must be applauded. However, a better option exists that the honorable minister might wish to consider – electric vehicles. Presently, in a power-starved country like India, EVs may appear to be a poor joke. However, EVs are being taken more and more seriously in many countries as a viable alternative to petrol or diesel. In 2013, Estonia became the first country to have nation-wide network of electric vehicle charging stations, but Australia, China, Denmark, Norway, France, the Czech Republic, Italy, Germany, Switzerland, the Netherlands, Israel, Poland, Brazil, Spain, and several other countries have embarked on increasing electric vehicles on their roads.

Even at the highest electricity price bracket in India, EVs prove to be cheaper than petrol or diesel. EVs are not only more environmentally friendly but also quieter, more fuel-efficient, offer a smoother ride, and are easier to maintain. However, there are two hurdles for EVs to overcome before they become ubiquitous. The first is the range EVs can travel upon each charge. While Tesla’s Model S claims to run 425 kms on a single charge, few can afford its hefty price tag. However, affordable and budget options range from the Kia Soul (200 kms) and Volkswagen e-Golf (190 kms) to the Fiat 500e (140 kms) and Nissan Leaf (135 kms). EVs have spread to include motorcycles, scooters, and even Sports Utility Vehicles.

The mileages EV manufacturers claim to deliver are not bad and will only increase in future. However, these numbers are only ideal estimates – in a worst-case urban scenario, if you are stuck in traffic during a heatwave with the air conditioning on full, the mileage may fall as much as 40% and will require more frequent recharging. This brings us to the second problem – charging stations and the time required to recharge an EV.

Given the relatively short range of EVs compared to regular vehicles, a good network of recharging stations is of paramount importance. Yet due to the long time it takes to recharge present EV batteries, a better solution is to swap out used batteries for charged ones at the EVB station; the vehicle can be recharged overnight at home. This would mean that consumers would only pay for the power consumed and a small surcharge for the EVB itself; EVs need not come with expensive batteries.

Furthermore, technology can improve at two ends – energy efficiency at the EV end and greater storage capacity at the EVB end. The latter would translate into better performing vehicles without the consumer having to regularly upgrade his EV.

The government can play an encouraging role on many fronts in the establishment of an EV network. Fortuitously, most such programmes will be universally beneficial and not limited to vehicle owners. For example, the government can focus on building better roads which will help not just fuel efficiency but transportation as a whole. To provide power for a potential EV market, more power plants need to be set up; residential solar panel arrays and base load nuclear power will provide power cheaply and reliably in an environmentally friendly manner to EVs but also to industry and millions of homes in India that are yet without power.

The government can also provide tax incentives to those opting for an EV over a regular vehicle for the first few years; short-term incentives can also be provided to charging station owners to encourage faster development of an EVN. Interestingly, studies in Europe have shown that the greatest factor in the spread of EVs was not the tax incentive but a better EVN. Finally, the government can play a role in encouraging the industry to come up with standard EVB dimensions for various types of vehicles to ease business.

The government’s investments in improving the power situation and roads will have to be made anyway; yet in conjunction with EVs, they can reduce India’s energy import bill and health costs in the long run due to cleaner air. This can be achieved without reducing available farmland for foodcrops and expensive subsidies to an environmentally questionable industry like ethanol. Moreover, EVNs fit well with Narendra Modi’s vision of smart cities and bullet trains; it may take a couple of decades to stretch them across the nation, but Rome was not built in a day.

This post appeared on Daily News & Analysis on June 01, 2014.