The race is on for the logistics industry that powers commercial trucking to decarbonise as soon as possible across the globe. Climate action can no longer be seen as optional. Global corporations have to help the world move the needle towards a greener future with decisive steps today. The commercial transportation sector contributes around 7 percent of total greenhouse gas (GHG) emissions, with heavy vehicles (HVs) contributing substantially. Poised for exponential growth on the back of rapidly rising e-commerce, growing manufacturing activity, upcoming infrastructural needs and India’s emergence as an economic hub in the region, the logistics industry must quickly think of ways to reduce its environmental footprint without denting profitability.
In a highly fragmented logistics market like India, companies require sustainable and cost-effective alternatives to conventional but highly polluting diesel-powered fleets. The intense competition between smaller and medium logistics players makes them cost-conscious and capping operational expenses remains one of their top priorities. Trucks powered by Liquefied Natural Gas (LNG) are emerging as a promising solution.
While urban transport in India has been helped by compressed natural gas (CNG) in its quest to reduce pollution in the last decade, it is not a viable option for long-range trucks as a full tank does not go a long distance. Meanwhile, the green quotient of LNG trucks has been firmly established through studies. None other than the International Energy Agency, the autonomous intergovernmental organisation dedicated to global energy security, observes the use of LNG trucks reduces carbon dioxide emissions by up to 30 percent compared to diesel vehicles and almost eliminates sulphur oxide emissions, a major concern in air pollution. Emission of particulate matter and nitrogen oxides are also cut compared to diesel trucks, benefiting the environment and our lungs.
As a result, we find populous countries with a large logistics footprint take to them at a fast clip, such as China. About a fifth of total new truck sales in the economic behemoth are LNG trucks, and make up a significant portion of the country’s heavy-duty fleets.
China started assessing LNG way back in 1961 and has made large strides in adopting it for its road transport. Its fleet of 582,000 LNG heavy-duty trucks and 4,800 LNG stations make it the world’s largest market for LNG trucks. Europe began considering LNG for its HDV segment between 2011-13. Italy and Spain have been particularly ahead of the curve with the former boasting over 3,000 LNG HDVs and 103 refuelling stations. Spain is adding to its 2,156-strong trucks running on LNG and 76 refuelling stations.
As the world’s third-largest emitter of carbon dioxide, India is strapped for time to spur the widespread adoption of clean energy, especially in transport. LNG is bound to be crucial in its energy mix that India hopes will comprise 15 percent natural gas by 2030, from the current 6 percent.
The Indian government is aware of its relevance in sectors such as transport and logistics, mining, agriculture and construction, as seen in its draft LNG policy that lays down actionable insights for infrastructure, safety, and regulatory clarity geared to increase LNG use as a transport fuel in the HDV sector.
NITI Aayog in its 2024 report, ‘LNG as a Transportation Fuel in Medium & Heavy Commercial Vehicle Segment’ in collaboration with the Embassy of the Kingdom of the Netherlands, echoed the industry in its findings on how LNG, as a cleaner, quieter and more efficient alternative to diesel, can help India transition to a gas-based economy, a determining step in its goal of turning carbon neutral.
The government’s allowing retro-fitting of diesel vehicles with LNG and even private players to install LNG fuel stations, and classifying dual-fuel vehicles will help speed up LNG adoption as will its focus on ramping up of refuelling infrastructure, complete with details on storage, handling and operation of retail dispensing outlets, terminals, pipelines, and regassification facilities as mentioned in the draft LNG policy.
Clarifying investment norms, technical requirements and incentivising sectors such as transport and logistics, some of which the draft LNG policy includes, will further optimise adoption with strategic inputs from the government. For now, the creation of 1,000 retail LNG outlets, with an initial 50 along the Golden Quadrilateral, will reassure early adopters.
Of course, LNG trucks are not the only sustainable solution for logistics. But LNG can be an immediate alternative to diesel, combatting air and noise pollution caused by HDVs, for the next 10-15 years. Heavy vehicles using cleaner fuels such as hydrogen and batteries are likely to become relevant after 2030 as prohibiting factors such as immature infrastructure and technology, and high cost of ownership get mitigated over time.
We cannot wait for our trucks and other heavy vehicles to rely on fossil fuels and continue with the same level of pollution as now. A mix of greener fuels must power HDVs in the meantime. The goal of sustainability will be aided by more flexibility and adaptability in access to these different fuels and the cost of shifting to them in the next decade. LNG, with its higher range for HDVs and lower cost, is suited for heavy and medium vehicles and hence, the logistics industry.
LNG trucks provide industries heavily reliant on transportation with a practical blend of environmental benefits and economic viability. Indian interstate fleet owners and with them, our logistics players, are realising the cost benefits of LNG HDVs. The more stable and cheaper alternative to diesel trucks has been known to reduce fuel costs by as much as 20-30 percent. LNG as a fuel has also shown price stability compared to fossil fuel, which has been on a steady rise. Unpredictable operational expenses led by fuel price volatility don’t sit too well with logistics and fleet companies.
LNG trucks’ cost advantage does not mean they fall short in their range for long-haul travel. On a full tank, they can cover up to 1,400 km, in sharp contrast to the limitations of shorter ranges and longer refuelling times.
The countries ahead of us in the LNG adoption curve have shown us ways to encourage its use. For example, banning diesel HDVs in certain highly-polluted regions, or allowing LNG-only trucks in low-emission and sound zones. We have even seen city councils mandate a minimum percentage of LNG trucks for plying in cities and high-pollution areas. Logistics companies can begin to invest in a future-ready fleet that would stay on top of these best practices when India adopts them.
It is undeniable that in an emerging economy like India, businesses cannot afford the economic burdens associated with some high-cost renewable alternatives. LNG trucks are a self-sustaining pathway for them to achieve sustainability without compromising the bottomline.
If government impetus and industry initiatives can incorporate the best practices from around the world, trucks powered by this clean fuel can fast-track India and its logistics sector on their way to a zero-emission future.
