With an aim to action, to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity, United Nations adopted The Sustainable Development Goals (SDGs) in 2015.
Corporates actively participate in SDGs like Affordable and Clean Energy, Responsible Consumption and Production, and Climate Action. Be it planting more trees or reducing carbon emission through conscious operations changes, aim to be carbon neutral. Initiatives undertaken towards meeting SDGs are also a part of Environmental, Social, and Governance (ESG) factors considered for sustainable growth.
SDGs AND LEGISLATIVE INITIATIVES:
Creating career and business opportunities, safe and affordable housing, and building resilient societies and economies is vital to making cities sustainable. Implementing policies[1] like Sashakt Bharat – Sabal Bharat, Swachh Bharat – Swasth Bharat, Samagra Bharat – Saksham Bharat, Satat Bharat – Sanatan Bharat, and Sampanna Bharat- Samriddh Bharat, the Government of India is positively working towards achieving the set targets.
ESG RATING FRAMEWORK:
Now more than ever, investors are considering the commitment towards ESG factors for long-term sustainable investment opportunities.
As a sustainable rating model, various metrics evaluate the ESG commitment. Morgan Stanley Capital International ESG Metrics (MSCI ESG) has the rating divided into three categories – LAGGARD (CCC/B), AVERAGE (BB/BBB/A), and LEADER (AA/AAA). The other rating frameworks include the Global Reporting Initiative (GRI) and ISO framework.
CARBON NEUTRAL TRANSPORT:
Using Electric Vehicles (EVs) is one technique to reduce carbon emissions. Corporates and the Government are actively working to make EVs an affordable reality for the public. The India Electric Vehicle Market was valued at USD 5 billion in 2020 and is expected to reach a whopping USD 47 billion by 2026 while registering a compound annual growth rate of above 44% during the forecast period (2021 – 2026)[2].
The upcoming budget is eyed by the auto industry players mainly for rationalisation of GST on EVs components at a rate of 5% and introducing new incentives to help make EVs an affordable choice[3].
Auto players like TATA Motors, Mahindra, Ashok Leyland, and Hero, among others, are already in the EVs space. Cab Service provider, OLA, has also recently launched electric bikes while exploring the launch of e-rickshaws and investing in charging stations. It won’t be long to see other competitors pick pace, considering the growing support from the Government in this space.
INITIATIVES BY GOVERNMENT:
India’s commitment to the EV30@30 initiative – to reach a 30 percent sales share for EVs by 2030 – presents a massive cumulative investment opportunity of INR 19.7 lakh crore ($US266 billion)[4].
While there are challenges to making EVs the first public choice, the advantages are no less. It includes environmental benefits, better energy efficiency, and mechanical advantages.
The recent initiatives undertaken by the Government to achieve the commitment include:
1. Production-Linked Incentive (PLI) Scheme –
- INR 18,100 crores (US$2.4 billion) was approved for investments in advanced chemistry cell (ACC) battery manufacturing and INR 26,058 crore (US$3.5 billion) for automotive manufacturing focusing on EVs and hydrogen fuel cell vehicles
2. National Electric Mobility Mission Plan (NEMMP) 2020 –
- NEMMP was introduced with a target to ply 4,00,000 passenger battery electric cars (BEVs) by 2020, thereby avoiding 120 million barrels of oil and 4 million tons of CO2.
3. e-Rikshaw –
- The Government of India announced the Deen Dayal scheme in June 2014, which aimed to assist in the financing and procurement of the battery rickshaws in the country.
4. FAME India scheme – Phase I and Phase II –
- Under Phase I – a subsidy was given to 11 cities for launching electric buses, taxis, and three-wheelers.
- Under Phase II – The Government had approved an outlay of Rs. 10,000 Crore for a period of 3 years, commencing from 1st April 2019. Out of total budgetary support, about 86 percent of the fund has been allocated for Demand Incentive to create demand for EVs.
5. Individual State EV policies –
- Approximately 19 states have adopted, and some are adopting regulations that specify incentives for manufacturing and use of EVs, thereby facilitating the demand for EVs.
Among various EVs, the popular ones are Plug-in EVs, further categorised as Plug-in Hybrid Electric vehicles (PHEVs) and Battery electric vehicles (BEVs). The BEVs exclusively use chemical energy stored in rechargeable battery packs.
A crucial building block of the lithium-ion rechargeable batteries that power electric vehicles (EVs), laptops, and mobile phones is Lithium.
REPLACING LITHIUM-ION WITH SODIUM-ION:
In a recent study published by the Journal of the American Chemical Society, the researchers demonstrated that a Sodium-ion battery exhibits charge/discharge rate and capacity values among the highest achieved for both organic Sodium-ion and Lithium-ion batteries[5].
In this regard, with the declining resources of lithium-ion, the latest investment by Mr. Mukesh Ambani in the energy deal is very prominent. He invested USD 136 million in sodium as a part of the energy deal, proposed to be used in Reliance’s battery Gigafactory in Jamnagar, Gujarat. As most auto players are planning to outsource the manufacturing of batteries for EVs, this investment is expected to boost revenues while providing employment opportunities to meet the increased demand.
This is only for informational purposes. Nothing contained herein is, purports to be, or is intended as legal advice and you should seek legal advice before you act on any information or view expressed herein. Endeavoured to accurately reflect the subject matter of this alert, without any representation or warranty, express or implied, in any manner whatsoever in connection with the contents of this. This isn’t an attempt to solicit business in any manner.
Sources: United Nations Department of Economic and Social Affairs Sustainable Development, E-Vehicle Info, CNBC TV18, Vikaspedia and Phys.org