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India’s Plan To Sell Only Electric Vehicles By 2030 Is An Ambitious Target, Says Fatih Birol       

Birol said many advanced economies are phasing out coal but it will be different for emerging countries.

An charging plug connects an electric vehicle to a charging station at Kongens gate in Oslo, Norway. (Photographer: Fredrik Bjerknes/Bloomberg)
An charging plug connects an electric vehicle to a charging station at Kongens gate in Oslo, Norway. (Photographer: Fredrik Bjerknes/Bloomberg)

India’s plan to sell only electric vehicles by the end of next decade is an ambitious target, according to International Energy Agency’s Executive Director Fatih Birol.

The Bharatiya Janata Party-led government is pushing cleaner vehicles as the country looks to pare reliance on fossil fuels to curb pollution and reduce oil imports.

“It’s very good that the government has ambition for electric vehicles to be front runner in India, but one has to be careful how this transformation will take place,” Birol told BloombergQuint in an interview. “In my view, it will take some time to see 100 percent electric vehicles and 2030 is an ambitious target.”

While it is good that the government is driving this programme, Birol said challenges are simple with building infrastructure for electric cars and cost challenges for EVs compared to petrol cars. “In Europe, government is subsidising electric cars, so the same scheme can be incorporated here.”

Niti Aayog, the government’s premier think tank, is preparing a road map to phase out petrol and diesel vehicles in about a decade. Finance Minister Nirmala Sitharaman had announced sops for buying electric vehicles in Budget 2019.

Talking about the impact on demand of oil in India due to electric vehicle push, Birol said that it won’t have a major impact on India considering oil demand growth prospects are good because the petrochemical and automotive sector is very strong.

IEA May Cut Oil Demand Growth Forecast Again

The International Energy Agency may revise its global oil demand outlook due to a slowdown in the global economy, Birol said. “We have already revised oil demand forecast to 1.1 million barrels per day which is much lower than previous years. But if the world economy situation, especially in China, worsens, we may give a second look and revise our oil demand outlook.”

The Paris-based intergovernmental organisation had last year predicted that 2019 oil demand would grow by 1.5 million bpd but had cut the growth forecast to 1.2 million bpd in June this year. This was done on the back of U.S.-China trade war and tensions in the Middle East.

Tanker Attacks In Strait Of Hormuz

Calling the recent attacks on tankers in the Strait of Hormuz a threat to global trade, Birol said IEA is very worried with the recent attacks in Hormuz because everyday 18 million barrels of oil is passing through the strait. “About one-third of global oil trade goes from there. One-third of global liquefied natural gas also goes from the strait.”

Birol said about two-thirds of Indian oil imports come from the Strait of Hormuz. “Who is affected the most? India China, Japan and Korea which are heart of the global economy.”

Phasing Out Coal

The global issue of phasing out coal should be discussed fairly depending on the economy, Birol said, adding many advanced economies are phasing out coal but the change will be different for emerging countries. “In advanced economies, the average age of coal plants is 42 years whereas in emerging Asia, the average age of coal plants is 11 years which is very young fleet. A 42-year coal plant is close to retirement and phasing out is easier. But when it is very young, investment has been done a few years ago, there is a huge financial challenge here. We cannot ignore this.”

Birol said power plants in many advanced economies are generating electricity to provide electricity to fifth television in the kitchen. “But in emerging countries, it may be generating electricity in villages to provide electricity to refrigerator or provide medication for kids. There is a big social difference here.”

Watch the full interview here: