Friday, August 16, 2013

Debunking India's Transport Diesel Consumption Mystery

India’s love for diesel in the transport sector is over! 
At least, this is what Indian government data on diesel consumption would suggest. Official statistics report low consumption and stagnating growth of diesel fuel in transport. However, this data contrasts starkly with experts’ findings that both diesel consumption and CO2 emissions from transport are on the rise. The reality is that the Indian transport sector’s thirst for diesel is actually increasing at an alarming pace.  
Official Statistics from Ministry of Petroleum and Natural Gas
India's transport sector is powered by diesel and it accounts for 60-70% of transport fuel consumption. The 2011 Energy statistics from Indian government reported transport sector diesel consumption around 33 million tons.  The main point of interest is  year 1995-1996 where we see a drop of 28%. It took nearly 13 years to recover this drop as the diesel consumption growth increased marginally. The IEA in its 2004 energy outlook projections reflected this impact and scaled down the earlier projections of oil consumption (WEO 2000) i.e. 2020 projections were reduced by half. The impact of this is also reflected in India's national communication estimates. The most recent official estimate of transport CO2 emissions is the 2007 greenhouse gas inventory. It has been estimated that the road transport sector emitted, 121.21 million tons of CO2 in 2007. The same central agency in 2000 had quantified CO2 emissions from road transport sector is 105 million tons with 48 million vehicles . 




Researchers who have analyzed this drop have come to varied conclusions. Timilsina reported that the change in diesel consumption maybe a statistical adjustment in the reporting of diesel consumption and further suggests that  "It is thus likely that both CO2  emission growth and transportation energy intensity for India ought to be revised downwards from 1980 to 1995 to reflect this adjustment". While, Zhou et al. built several scenarios to discover the drop in emission growth. Among the scenarios, more interesting were possible 18% increase in fuel consumption due to fuel adulteration and backcalculation of truck activity to reflect such drop in consumption i.e. annual truck activity of 12000 to 36000km/year. The main conclusion was that such drop is unrealistic
The cause for worry is further intensified with the release of latest statistics from energy agencies. Recent statistic reports (statistics - 2012 and 2013 ) has completely revised the diesel consumption values and suggested a major reallocation of transport diesel consumption values to more mysterious "miscellaneous services". The drop is 5 to 6 times. The 2011 diesel consumption value has been readjusted around 5 million tons from earlier 33 million tons. The miscellaneous category shows an increase of 10 times but no definition exists on what actually this means. To draw parallel, in terms of CO2 emissions from diesel consumption,  it is a drop from around 100 million tons to around 15 million tons. Since, Indian transport industry is mainly powered by diesel, this would mean drastic reduction in India's transport carbon emissions (around 85 million tons). This decrease is equivalent to annual transport carbon emission of Indonesia which has a vehicle fleet of more than 50 million vehicles. This proves that numbers shown by the government does not tell the whole story. This so-called reduction is not a cause for cheer but for worry.
Rapid dieselization of fleet
Bottom up data reveal a completely different story. Over the same period, number of diesel vehicles increased two to three fold in terms of vehicle registrations. Analysis of data from Society of Indian Automobile Manufacturers  reveal an annual growth of 14% in sales of trucks and buses from 1990 to 2011. 
The freight activity (tonkm) increased by more than 2 times. This means that growing numbers of trucks are traversing length and breadth of the country transporting goods. Over the same time period, economy data reveals growing income and no sustained impact of recession. GDP per Capita increased by more than 5% annually.  
Big gap in gasoline and diesel prices ( diesel per liter costs 20 rupees less) have made use of diesel in passenger car segment attractive. CSE suggests that In 2011-12, diesel cars accounted for over 40 per cent of the total car sales in the country. Industry experts believe that by 2015, diesel cars sales would be around 43%.
Crunching Numbers
Analysis of this transport growth by Lee Schipper's  ASIF framework by different researchers and institutions show enormous discrepancy in government statistics. While researchers do not agree with each other on what exactly is the actual diesel consumption value, what is significant to note (figure) is that even under the worst possible  scenario, India transport sector's thirst for diesel is not slowing down but increasing at a very rapid pace. There is a significant gap in-between what government statistics suggest and what researchers and experts predict.  The difference can be as high as five to eight times the official reported values.

Not knowing the magnitude of actual consumption or wrongly assuming low consumption would make it much more difficult for policy makers to find solutions to decrease dependency on fossil fuel. There is a significant gap in-between what government statistics suggest and what researchers and experts predict.  Not knowing the magnitude of actual consumption would make it much more difficult for policy makers to find solutions to decrease dependency on fossil fuel. 
A shorter form of this blogpost is published originally  in thecityfix.com (http://thecityfix.com/blog/debunking-india-diesel-consumption-mystery-co2-emissions-sudhir-gota/)

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