Author : Nandan Dawda

Expert Speak Terra Nova
Published on Jun 15, 2024

India’s net-zero commitment depends on robust policies and strong institutional frameworks for decarbonising its transport sector.

Greening India’s transport sector

The rising demand for mobility and increased motorisation have significantly boosted energy consumption in India’s road transport sector, leading to higher CO2 emissions. As of 2021, road transport accounted for 14 percent of the nation’s total energy consumption. The road sector accounts for 92 percent of the nation’s total energy consumption by transportation, with rail and domestic aviation, each comprising 4 percent. The sector also contributes 14 percent of India’s energy-related CO2 emissions—a proportion anticipated to rise as the vehicle fleet expands, despite its current small size relative to the large population. The escalating demand for internal combustion engine (ICE) vehicles has significantly increased energy consumption and emissions, doubling since 2000. 

Moreover, India’s road freight transport holds the highest fossil fuel demand globally. The substantial increase in freight transport, which has grown tenfold since the 1990s and is predominantly driven by ICE heavy-duty vehicles (HDVs), is expected to further elevate the sector’s fossil fuel consumption. 

Road transport, relying on petrol and diesel for 95 percent of its energy needs, is India’s largest oil consumer, constituting 44 percent of total consumption in 2021. Alternative fuels such as natural gas, electricity, and biofuels play only a marginal role. Since 2000, energy demand and CO2 emissions from road transport have more than tripled, with freight trucks and passenger cars each contributing approximately one-third to this increase. In 2021, trucks accounted for 38 percent of fuel consumption and emissions, while cars accounted for 25 percent. Although two- and three-wheelers comprised 80 percent of the vehicle stock, their contribution to energy demand and emissions was only 20 percent, but this share has steadily risen since the 2010s. Overall, per-capita emissions from this sector have increased by 2.5 since 2000.

Greening the transport sector

Transforming the energy profile of India’s transportation sector is essential to mitigating these impacts. It also offers several co-benefits, including improved public health, enhanced fuel efficiency, reduced noise and air pollution, and decreased road congestion, leading to shorter commutes and a better quality of life. Furthermore, lower traffic volumes can enhance urban spaces for pedestrians and cyclists. Optimising logistics in freight transportation can result in cost savings and better working conditions.

Decarbonisation and energy transition of the transport sector is imperative for India to fulfil its commitment to its net-zero carbon emissions by 2070.

Decarbonisation and energy transition of the transport sector is imperative for India to fulfil its commitment to its net-zero emissions by 2070.

Challenges to energy transition 

However, the energy transition of India’s transport sector faces several multi-domain hurdles.

i. Social challenges

India relies heavily on coal mining for economic sustenance, with the sector contributing 2 percent to the national GDP and providing 1.2 million jobs. Shifting towards cleaner energy sources threatens to disrupt livelihoods and local economies, necessitating a ‘just transition’ framework to mitigate socio-economic impacts. Such a framework should also aim to formalise the informal coal sector, which provides livelihoods to approximately 0.25 to 0.3 million workers. This shall ensure the equitable benefit distribution and facilitate a smooth transition for affected communities. 

ii. Alternative fuels

Challenges related to feedstock availability and infrastructure requirements are impacting ethanol production in India. Significant investments are needed to establish ethanol production facilities, transportation networks, and storage infrastructure. Biodiesel production encounters hurdles ranging from low procurement by oil companies to limited incentives for farmers to cultivate feedstock. Similarly, the market adoption of methanol, despite its promising attributes, is impeded by the high costs of vehicle modifications and production. 

Challenges related to feedstock availability and infrastructure requirements are impacting ethanol production in India. Significant investments are needed to establish ethanol production facilities, transportation networks, and storage infrastructure.

Both electricity and hydrogen face technical, infrastructural, and economic challenges. Electric vehicles (EVs) require robust charging infrastructure, longer driving ranges, and cost-effective battery technologies to compete with conventional vehicles. Hydrogen-powered vehicles necessitate extensive refuelling infrastructure and face challenges related to hydrogen production, distribution, and storage. Overcoming these barriers entails significant investments in infrastructure development and technological innovation. Moreover, consumer perception and acceptance of EVs and hydrogen vehicles play a crucial role in their adoption.

iii. Infrastructure and Finance

Infrastructure and financial barriers further complicate India’s transition towards decarbonising transportation. The scale of investments required to develop alternative energy sources and infrastructure is substantial. Land acquisition issues, unclear regulatory frameworks, and bureaucratic hurdles often delay project implementation, leading to cost overruns and delays. 

iv. Policy, institutional, and regulatory support

The absence of well-defined administrative and legal frameworks hampers coordinated policy efforts and institutional coordination. Conflicting institutional interests and a lack of proactive measures towards energy transition policies further exacerbate the situation. Effective policy, institutional, and regulatory support is also necessary to identify and promote local and imported feedstocks for ethanol production. Likewise, streamlined regulatory processes and policies to incentivise stakeholders across the value chain are essential to increase the market adoption of ethanol.

Towards the transport sector’s decarbonisation

India’s energy transition and decarbonisation of the transport sector demands strategic planning and meticulous policy implementation.

India’s energy transition and decarbonisation of the transport sector demands strategic planning and meticulous policy implementation. The rigorous implementation of the following policies could drive transformative change:

Data Availability and Modeling: Establishing a comprehensive dataset and modelling framework is imperative to visualise transition pathways and craft effective policies. Collaboration among diverse stakeholders is essential to collect and analyse data on transportation behaviour, energy consumption patterns, and vehicle types. This robust foundation facilitates evidence-based decision-making in policy formulation.

Context-specific diagnosis: Developing a toolset for context-specific diagnosis of barriers and solutions related to renewable fuels and low-carbon vehicles is paramount. This entails creating benchmarking frameworks and decision trees aligned with the UN Sustainable Development Goals. Such diagnostic tools empower policymakers to tailor interventions according to the unique challenges and opportunities present in different regions or sectors.

Policy, regulatory, and institutional interventions: Coordinated national and state-level policies with a firm commitment to fostering and enabling environment for sustainable transportation are indispensable to reducing transport sector emissions. Collaboration among key stakeholders, including government bodies, industry players, and civil society organisations, is crucial for developing economically viable solutions. Harmonising policies across energy, transport, and transition sectors ensures a cohesive approach towards achieving decarbonisation goals.

Learning from successful initiatives: India can draw valuable lessons from successful initiatives implemented worldwide to develop a comprehensive energy transition roadmap for its transport sector. Collaborating with developed countries and international organisations such as the United Nations (UN) and the International Energy Agency (IEA) can facilitate knowledge exchange and accelerate mitigation efforts.

Capacity building and institutional framework: Enhancing technical proficiency and establishing dedicated institutions for transport planning are imperative to bridge the gap between policy formulation and implementation. Building the capacity of relevant stakeholders, including policymakers, planners, and technical experts, will ensure the effective execution of energy transition strategies.

Investment and financial interventions: Coordinated investment in low-carbon infrastructure necessitates the development of rigorous evaluation criteria and diversified revenue streams. Public-private partnerships and sustainable finance frameworks can help attract private investment and mobilise resources for sustainable transport projects through streamlined regulatory processes, enhanced transparency and incentives for private sector participation. 

Regulatory measures: Implementing fuel economy standards and robust enforcement mechanisms for heavy-duty transport can significantly reduce emissions. Policy interventions aimed at promoting electric vehicle adoption, such as public procurement mandates and awareness campaigns to encourage the uptake of EVs, are essential for achieving carbon emissions reduction goals and fostering a transition towards cleaner mobility solutions.


The realisation of India’s net-zero commitment sector hinges upon the establishment of robust and actionable policies supported by comprehensive institutional frameworks for the decarbonisation of its transport sector. The lack of coordinated efforts, well-defined regulatory structures and institutional coordination could not only undermine India’s domestic environmental objectives but also jeopardise its broader global commitments to combatting climate change.

Nandan H Dawda is a Fellow with the Urban Studies Programme at the Observer Research Foundation.

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Nandan Dawda

Nandan Dawda

Dr Nandan H Dawda is a Fellow with the Urban Studies programme at the Observer Research Foundation. He has a bachelor's degree in Civil Engineering and ...

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