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Decarbonise transport sector through modal shift, zero emission vehicles: NITI report

February 10, 2026 5 min read Environment & Ecology Economics Science & Technology GS3 (Environment Economics Science & Technology)
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What Happened

  • NITI Aayog stressed the need to decarbonise the transport sector through modal shift, zero-emission vehicles (ZEVs), and clean fuels and technologies to achieve India's Net Zero 2070 goal
  • The transport sector accounts for 20% of India's final energy demand and approximately 10% of greenhouse gas (GHG) emissions (2020 data)
  • The report, part of the "Scenarios Towards Viksit Bharat and Net Zero" series, projects that electricity, biofuels, and hydrogen can meet nearly 90% of transport energy demand by 2070
  • Implementing the Net Zero pathway for transport requires cumulative investment of approximately USD 4.3 trillion by 2070 — about 25% higher than the USD 3.44 trillion under the Current Policy pathway

Static Topic Bridges

Zero Emission Vehicles (ZEVs) — Types and Technology

Zero Emission Vehicles produce no direct exhaust emissions at the point of operation. The two primary ZEV technologies are Battery Electric Vehicles (BEVs) and Fuel Cell Electric Vehicles (FCEVs). India's approach to ZEV adoption combines demand-side incentives (subsidies) with supply-side push (emission standards and potential ZEV mandates).

  • Battery Electric Vehicles (BEVs): Powered by lithium-ion batteries; zero tailpipe emissions; examples include Tata Nexon EV, MG ZS EV, Mahindra XUV400
  • Fuel Cell Electric Vehicles (FCEVs): Use hydrogen fuel cells (proton exchange membrane) to generate electricity; emit only water vapour; examples include Toyota Mirai, Hyundai Nexo
  • Hybrid vehicles: Not ZEVs — include internal combustion engine alongside electric motor (HEVs, PHEVs)
  • India's EV target: 30% of all new vehicle sales by 2030 (government aspiration)
  • BS-VI emission norms: Implemented from 1 April 2020 (India leapfrogged from BS-IV); aligned with Euro-VI standards — applies to ICE vehicles
  • Heavy-duty vehicles: Account for nearly 40% of transport emissions despite being only 2% of the vehicle fleet — critical segment for decarbonisation

Connection to this news: The NITI Aayog report's emphasis on ZEVs aligns with the global trend toward electrification, but India's approach uniquely includes biofuels and hydrogen alongside battery-electric technology, reflecting the country's fuel-diverse strategy.

Government EV Policies — FAME, PM E-DRIVE, and Production-Linked Incentives

India has implemented multiple policy instruments to promote electric vehicle adoption, evolving from the initial FAME scheme to the more comprehensive PM E-DRIVE initiative. These policies combine demand incentives (purchase subsidies), supply incentives (manufacturing subsidies), and infrastructure development (charging stations).

  • FAME I (2015-2019): Faster Adoption and Manufacturing of Electric Vehicles; outlay of Rs 895 crore; demand incentives for EVs
  • FAME II (2019-2024): Enhanced outlay of Rs 10,000 crore; covered 2-wheelers, 3-wheelers, 4-wheelers, and buses; mandated domestic value addition
  • Electric Mobility Promotion Scheme (EMPS): April-September 2024 interim scheme (Rs 500 crore) bridging FAME II and PM E-DRIVE
  • PM E-DRIVE (October 2024): Rs 10,900 crore outlay; incentives for e-2W, e-3W, e-buses, e-trucks, and e-ambulances; subsidy for e-2W at Rs 5,000/kWh (max Rs 10,000 per vehicle)
  • PLI (Production-Linked Incentive) for Advanced Chemistry Cell (ACC) batteries: Rs 18,100 crore; promotes domestic battery manufacturing
  • National Electric Mobility Mission Plan (NEMMP) 2020: Launched 2013; set the early target of 6-7 million EVs by 2020

Connection to this news: The NITI Aayog report's USD 4.3 trillion investment estimate for transport decarbonisation signals that current policy instruments (PM E-DRIVE, PLI) will need significant scaling up to achieve the net-zero pathway in the transport sector.

Modal shift refers to moving freight and passenger traffic from carbon-intensive modes (road) to more efficient modes (rail, waterways). Road transport currently dominates India's freight movement and is significantly more carbon-intensive per tonne-kilometre than rail or inland waterways.

  • India's freight modal split: Road ~65%, Rail ~27%, Waterways ~6%, Pipelines ~2% (approximate)
  • National Logistics Policy (NLP), 2022: Targets reducing logistics cost from 13-14% of GDP to 8% through modal shift and efficiency
  • Dedicated Freight Corridors (DFCs): Eastern DFC (1,337 km, Ludhiana to Dankuni) and Western DFC (1,506 km, Dadri to JNPT) — designed to shift freight from road to rail
  • PM Gati Shakti (2021): National Master Plan for multi-modal connectivity; integrates 16 ministries on a single GIS platform
  • Sagarmala Programme (2015): Port-led development and coastal shipping promotion under the Ministry of Ports, Shipping and Waterways
  • Inland Waterways Authority of India (IWAI): Established 1986 under IWAI Act, 1985; 111 National Waterways declared under National Waterways Act, 2016
  • National Waterway-1 (Ganga, Allahabad to Haldia, 1,620 km): Most developed; Jal Marg Vikas Project for capacity enhancement

Connection to this news: The NITI Aayog report's emphasis on modal shift recognises that electrification alone is insufficient — moving freight from road to rail and waterways can deliver significant emission reductions even before vehicles are electrified.

Green Hydrogen and Biofuels — Alternative Transport Fuels

For segments where battery electrification is challenging (long-haul trucking, aviation, maritime), green hydrogen and biofuels offer alternative decarbonisation pathways. India has launched dedicated missions for both.

  • National Green Hydrogen Mission (January 2023): Target of 5 MTPA green hydrogen production by 2030; outlay Rs 19,744 crore; Green Hydrogen Hubs planned
  • Green hydrogen: Produced by electrolysis of water using renewable electricity; zero carbon emissions
  • National Policy on Biofuels (2018, amended 2022): Target of 20% ethanol blending in petrol (E20) by 2025-26 (advanced from original 2030 target); promotes second-generation (2G) ethanol from agricultural residues
  • Ethanol blending achievement: India reached approximately 15% blending by late 2025
  • SATAT (Sustainable Alternative Towards Affordable Transportation) scheme: Compressed Bio-Gas (CBG) from agricultural waste, cattle dung, sewage; target of 5,000 CBG plants
  • Flex-fuel vehicles: Vehicles that can run on multiple fuel blends (E85 or higher); Bajaj, TVS, and other Indian manufacturers developing flex-fuel 2-wheelers

Connection to this news: The NITI Aayog study's projection that electricity, biofuels, and hydrogen can meet 90% of transport energy demand by 2070 reflects a multi-fuel decarbonisation strategy appropriate for India's diverse transport sector.

Key Facts & Data

  • Transport sector: 20% of India's final energy demand; ~10% of GHG emissions (2020)
  • Net Zero pathway transport investment: USD 4.3 trillion (25% higher than current policy pathway of USD 3.44 trillion)
  • Clean fuels by 2070: Electricity, biofuels, and hydrogen to meet ~90% of transport energy demand
  • Heavy-duty vehicles: 2% of fleet but ~40% of transport emissions
  • Ethanol blending target: E20 (20%) by 2025-26
  • Green Hydrogen Mission target: 5 MTPA by 2030; outlay Rs 19,744 crore
  • PM E-DRIVE outlay: Rs 10,900 crore
  • National Logistics Policy 2022: Target logistics cost reduction to 8% of GDP
  • Road freight share: ~65% (most carbon-intensive mode per tonne-km)