Context: Shifting to electric vehicles means subsidising the affluent. There are better alternatives.
Subsidies in e-vehicles:
Hefty subsidies are being offered by the central government and the state governments of Delhi, Maharashtra, Gujarat.
Together, these subsidies add up to Rs 5 lakh per car. They are presently time-bound and are being offered only by five states — Delhi, Maharashtra, Gujarat, Karnataka and Meghalaya.
Issues with the subsidies on e-vehicles:
The moral blindness: For only one in 50 of the 2.77 million cars sold in 2020-21 cost more than Rs 10 lakh.
A complete shift to EVs will therefore transfer Rs 2,770 crore from taxpayers to affluent fraction every year till the government terminates these incentives.
Ignoring the alternatives: Such a “start-up” subsidy would have been justified if there had been no alternative to electricity for replacing fossil fuels in the transport sector.
But there are alternatives — ethanol and methanol — whose superior quality and greater safety has made them the preferred, often the only permitted, fuels in major motor races since the 1960s.
Way Forward:
Gasification holds promise: Methanol can be produced from any biomass waste from crop residues to municipal solid waste, both of which are available in abundance.
The first commercial plant to convert 1,75,000 tons of refuse-derived fuel into 45 million litres of aviation turbine fuel is being commissioned outside Reno, Nevada.
Gasification holds even greater promise because simple, air-blown gasifiers are already in use in food processing that can convert rice and wheat straw into a lean fuel gas that can generate electricity and provide guaranteed 24-hour power to cold storage in every village.
A by-product, biochar, is no less valuable because it can replace imported coking coal in blast furnaces or be used as a feedstock for producing transport fuels even more easily than municipal solid waste.