Companies in the Indian logistics sector are having a busy time. As the country grows at a hectic pace, the logistics sector is seeing a parallel growth - studies suggest Indian road logistics sector to have CAGRs in the 8-9% range for the current period, putting them on growth parallel to that of the Indian economy.
And as the country decarbonizes, so should the logistics sector. How best can they do that?
For the logistics sector, and road transport sector in particular, there are multiple options available but what might make most sense for them is to embed different low carbon options calibrated for different timelines.
Ful scale electrification might be the evental result, but 100% electrification could be a long time away. For the timeline until about 2035, perhaps even 2040, natural gas might be a useful option to consider especially for the larger, commercial vehicles. Within natural gas, LNG could provide better performance given its much higher density than CNG (3X). Of course, building an LNG ecosystem adds those additional infra and systems costs, but it is certainly worth exploring for the freight and long distance transport.
Overall, the use of natural gas for transport is an exciting domain for consider in the context of Indian decarbonization sector. While India's natural gas production had been stagnant for the past two years, the Ministry of Petroleum & Natural Gas is ambitiously planning a 75% increase in production by 2024. Add to this massive plans for distribution infrastructure, and the impetus given to renewable natural gas from biogas (called compressed biogas in India), and you can sense the reasons for the excitement.
