By Shruti Srivastava
Oct 15, 2024 (Bloomberg) —India is finalizing plans to offer almost $2 billion in incentives to replace fossil-fuel powered passenger vessels on inland waterways, like barges and ferries, with a cleaner fleet.
The initiative, proposed by the shipping ministry earlier this year, will be backed by 149.2 billion rupees ($1.8 billion) in subsidies over ten years and is currently awaiting approval from the finance ministry, according to people familiar with the matter.
India is working to decarbonize its maritime sector with a slew of measures, including setting up green ports and introducing less polluting ships. It’s now targeting the small but growing inland shipping segment, which is set to double its 10,000 fleet by 2030.
Once fully implemented, the incentives would help cut about one million ton of emissions a year, said the people, who asked not to be identified as they aren’t authorized to speak to the media. A separate set of decarbonization guidelines are being drafted for cargo and cruise vessels, they said.
India’s finance and shipping ministries did not immediately respond to emailed requests for comment.
Under the plan, India’s fleet, which largely runs on diesel, would progressively switch to less polluting sources such as electricity, liquefied natural gas and hydrogen. Financial support, which would be disbursed over a decade, would target vessel procurement, retrofitting, and construction of shore infrastructure like refueling stations, fuel storage and docking facilities.
The government expects half of the existing inland passenger vessels to run on less polluting fuels by 2030, according to the strategy outlined in January. India, the third-largest global polluter, aims to hit net zero by 2070.
Registration of new fossil fuel-based inland vessels would stop by 2033, and the government aims for those craft to be fully replaced by the end of 2045.
© 2024 Bloomberg L.P.
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