FAME 2 scheme
What to study?
For Prelims and Mains: FAME- India scheme- features, significance and potential.
Context: NITI Aayog & Rocky Mountain Institute (RMI) Release Technical Analysis of FAME II Scheme. Report looks at potential saving in areas of energy, oil and carbon emissions.
Key highlights from the report:
- Effects of FAME II will go beyond the vehicles that are eligible under the FAME II.
- There is considerable energy and CO2 savings associated with the two, three, and four-wheeled vehicles and buses covered by FAME II over their lifetime, as well as the potential savings associated with greater adoption levels by 2030.
- The electric buses covered under FAME II will account for 3.8 billion vehicle kilometers travelled (e-vkt) over their lifetime.
- In order to capture the potential opportunity in 2030, batteries must remain a key focal point as they will continue to be the key cost driver of EVs.
- Vehicles eligible under FAME II scheme can cumulatively save 5.4 million tonnes of oil equivalent over their lifetime worth Rs 17.2 thousand crores.
- EVs sold through 2030 could cumulatively save 474 million tonnes of oil equivalent (Mtoe) worth INR 15 lakh crore and generate net CO2 savings of 846 million tonnes over their operational lifetime.
What are the salient features of FAME 2 scheme?
- Faster Adoption and Manufacturing of Hybrid and Electric Vehicles, or FAME 2 scheme aims to boost electric mobility and increase the number of electric vehicles in commercial fleets.
- Target: The outlay of ₹10,000 crore has been made for three years till 2022 for FAME 2 scheme.
- The government will offer the incentives for electric buses, three-wheelers and four-wheelers to be used for commercial purposes.
- Plug-in hybrid vehicles and those with a sizeable lithium-ion battery and electric motor will also be included in the scheme and fiscal support offered depending on the size of the battery.
How will FAME 2 scheme help improve charging infrastructure?
- The centre will invest in setting up charging stations, with the active participation of public sector units and private players.
- It has also been proposed to provide one slow-charging unit for every electric bus and one fast-charging station for 10 electric buses.
- Projects for charging infrastructure will include those needed to extend electrification for running vehicles such as pantograph charging and flash charging.
- FAME 2 will also encourage interlinking of renewable energy sources with charging infrastructure.
FAME India is a part of the National Electric Mobility Mission Plan. Main thrust of FAME is to encourage electric vehicles by providing subsidies. FAME focuses on 4 areas i.e. Technology development, Demand Creation, Pilot Projects and Charging Infrastructure.
- India needs auto industry’s active participation to ease electric mobility transition. The auto and battery industries could collaborate to enhance customer awareness, promote domestic manufacturing, promote new business models, conduct R&D for EVs and components, consider new business models to promote EVs.
- Government should focus on a phased manufacturing plan to promote EVs, provide fiscal and non-fiscal incentives for phased manufacturing of EVs and batteries. Different government departments can consider a bouquet of potential policies, such as congestion pricing, ZEV credits, low emission/exclusion zones, parking policies, etc. to drive adoption of EVs.