Need government policy to make bioethanol fuels price more affordable for wider adoption in India: Honda

India has the advantage of achieving carbon neutrality through bioethanol and renewable energy-based electrification but the government needs to create a mechanism to make prices of bioethanol fuel more affordable to make it economically viable for users, Honda Motor Co Ltd Chief Engineer Hiroya Ueda said on Tuesday.

Speaking at auto industry body SIAM's 3rd International Symposium for Thriving Eco-Energy in Mobility event, Ueda said ethanol has an edge over existing fuels in terms of cutting carbon emissions but the running cost is higher due to low fuel efficiency.

Stating that the running cost of fuel will be an issue and few initiatives could be taken up to increase the use of bioethanol, he said, "The government should create a mechanism to make fuel pricing more affordable and maintain economic viability for users through its policies." At the same time, he said vehicle manufacturers should continue to take initiatives to improve fuel efficiency.

"For the ethanol fuel to remain economically viable the fuel cost per km must be kept the same or lower compared to gasoline vehicles. To achieve this, initiatives including reducing tax on ethanol should be considered," Ueda said.

He further said, "One way could be to reduce the price of E100 (ethanol 100) from Rs 95 per litre to Rs 65 per litre just to bring down the vehicle running cost." Parallelly, he added, "OEMs also need to improve the vehicle mileage to achieve this." 

Ueda also pointed out that the promotion of ethanol fuel will have a beneficial impact on the farmers of India, where agriculture is prevalent and the majority of the population is in rural areas.

It is important to keep in mind the socio-economic development of the rural community, he said.

"Since ethanol can be supplied through existing gasoline stations, it seems that availability will not be an issue," Ueda said, adding that for CNG the infrastructure is gaining momentum but expansion will be gradual.

Asserting that in terms of the environmental benefit, ethanol has an edge, he said, "From a long-term perspective both flex-fuel vehicles and electric vehicles will be required for India's carbon neutral commitment.

Increasing ethanol concentration results in decreased fuel economy while if the price of ethanol remains the same as that of gasoline customers will have to bear higher running costs.

Arguing that ethanol has an edge over other existing fuels in terms of cutting carbon emissions, he said, "It is important to further promote the use of bioethanol fuel." 

In terms of electrification, he said with the adoption of renewable energy in the near future electricity would become more environmentally friendly and hence it is also important for OEMs to work on delivering electric vehicles.

On Honda's bioethanol initiative in India, he said learning from the company's experience in Brazil, the company has launched the CBF300 Flex Fuel in the country.