Market Development : Liquefied Natural Gas (LNG) as Long Haul Transport Fuel in India

India's energy demand is expected to double by 2040. In order to match supply to demand when dependence on fossil fuels must come down to fulfill the country's sustainability goals, the challenge is to choose an energy mix that supports sustainable development during the period. Natural gas has been accepted as the transition fuel of choice globally and it can allow India to diversify from solid fuels and oil products. This can address the growing pressure on the supply chain of different stakeholders to reduce carbon emissions. The subject paper is aimed at understanding the market development of LNG (Liquefied Natural Gas) as a transport fuel. It looks into the development of LNG as a transport fuel in the long haul and heavy-duty transport in the overseas markets of Europe, America, and China. The blueprint for the development of LNG as fuel for long-haul transport in India draws similarities with the overseas markets especially, Europe and China to the extent that there too, it was initially led centrally by their respective national governments or their union. Here too, in India, the development of refueling infrastructure and subsequent enabling regulatory frameworks is driven largely by the ministry of petroleum and natural gas and the PSUs under the union government. However, each market abroad had a key element that made it economically attractive: the US – low gas prices, Europe – high diesel taxes, China - Low incremental truck costs. The European Blue Corridor Project is more recent compared to other markets outside Europe viz. America’s National Green Highway (ANGH) and Chinese Blue Skies projects and therefore, have been referred to more frequently in the paper. In India, significant progress has been made in the supply side of LNG as a transport fuel but pricing of LNG at retail stations remains a challenge in terms of its affordability and capacity to replace the existing alternates i.e. diesel & CNG. With the current crisis arising from geopolitics, the situation has not been made any good. LNG, Bio LNG, and L-CNG make a good case for leveraging amongst each other the infrastructure made to date and investments to be made in the future for the further development of natural gas as transport fuel and towards the national commitment of the reduction of carbon footprint in India