The Japanese research and consulting firm Nomura Research Institute released its report titled 'Path to clean mobility: Increasing penetration of NGVs in India.'
Released at the Messe Frankfurt's NGV India Summit, 2022, the report highlighted major trends across the Natural Gas Vehicle (NGV) ecosystem disrupting the automotive industry.
With an increasing focus on blue hydrogen as a bridging solution, it stated that Natural Gas could play a vital role in the transition towards hydrogen economy.
It further added that the expansion of the CGD (City Gas Distribution) network and the increasing number of CNG stations are expected to encourage the proliferation of NGVs.
Additionally, with increased differential TCO (total cost of ownership) benefits compared to other fuels, CNG is gaining more prominence among consumer preferences post BS-VI.
The report noted that the number of CNG vehicles from March 18 to March 22 has grown by 5.3%. Further, the number of CNG stations also increase by 32% during the same time.
Ashim Sharma, Senior Partner & Group Head, NRI Consulting & Solutions, said that the immense volume and favourable conditions of the Indian automobile market give an opportunity to promote widespread adoption of NGVs in India.
The report underlined several challenges, including the fact that the domestic production of natural gas is much lesser than the reserves and investments in exploration and production are needed.
The other challenge highlighted by the report is that increase in CNG prices, and greater imports will make the economics unfavourable for CGD players and impact network expansion.
Higher gas prices will exacerbate the CGD industries' already unfavourable economics, limiting network expansion and negatively impacting consumer experience. Sharma said the government, industry, and CGD companies must all work together for India's NGV market to thrive in the future.
To get around the challenges, boosting NGV adoption is necessary through incentives and infrastructure development that will help establish economies of scale in manufacturing hence reducing costs.