Can India Implement The Norwegian EV Policy?
Norway officially known as the Kingdom of Norway is a Nordic country in Northern Europe whose mainland territory comprises the western and northernmost portion of the Scandinavian Peninsula. The population of the entire country is less than ten million. The country has been ranked at the 61st position in terms of size in the globe. The country has been striving towards excellence in the domain of the EV Sector. In 2020, Norway further cemented its position as a world leader in renewable technologies, as battery electric vehicles (BEVs) made up more than half of all vehicles sold in the country during the year. In the year 2020, the market share of BEVs rose to 54 per cent, up from 42 per cent in 2019, as per data released by the Norwegian Road Foundation (OFV). Only a decade ago, BEVs made up just 1 per cent of the overall market. Now let’s analyze the policies and initiatives behind the tremendous growth of EVs in a country like Norway. Let’s see what ideas from Norway can be implemented in a country like India.
Norway’s EV Policy
The vision of Norway’s EV Policy is to make sure that all the vehicles in the country should have zero-emission either hydrogen or electric. The current Norweigan Government has decided to keep the incentives for zero-emission cars until the end of 2021. After 2021 the incentives will be revised and adjusted parallel with the market development. The VAT exemption for zero-emission vehicles in Norway has been approved by the EFTA Surveillance Authority (ESA) until the end of 2022. The Norwegian Government are aiming to phase out the Internal Combustion Engine vehicles completely by 2025.
Key Aspects of Norway’s EV Policy
The Norwegian EV policy has been put Norway on the global map for its EV infrastructure and the percentage of the EVs used by the citizens. The country of Norway has the highest number of plug-in EVs being sold as compared to other countries all across the globe. I went through their EV policy and I was a bit fascinated. In this part of the blog, I will be explaining the three key aspects of Norway’s EV Policy. They are as follows:
- The 50% Rule
- Charging Infrastructure
- The Norwegian Car Tax System
The 50% Rule
In the year 2018, the Parliament of Norway has agreed on implementing a 50 % rule, which means that counties and municipalities can not charge more than 50 % of the price for fossil fuel cars on ferries, public parking and toll roads. This rule was already implemented for the state and county ferries and was being implemented for the road toll as well from 2019. A maximum 50 % parking fee at public parking for zero-emission cars is expected to be implemented by many municipalities.
Charging Infrastructure
As of January 2021, Norway has more than 330,000 EV’s and 3,200 cars that can fast-charge at the same time. By 2017 the Norwegian Government launched a program to finance the establishment of at least two multi-standard fast-charging stations every 50 km on all main roads in Norway. They have successfully established fast-charging stations on all main roads in Norway.
The Norwegian Car Tax System
The Norwegian car tax system works on a simple rule of taxing the high carbon emission vehicles higher than that of those vehicles which have lower or zero carbon emission. The above-cited taxing system can finance incentives for zero-emission cars without any loss in revenues. The Government of Norway has an ambitious goal that all new cars sold by 2025 should be zero (battery electric or hydrogen) emission vehicles. The government strives to achieve this by strengthening the green tax system rather than imposing a ban. The purchase tax for all new cars is calculated by a combination of weight, Carbon dioxide and NOx emissions and it’s a progressive method of taxing the vehicles.
The Norwegian Tax System can be best explained by considering the following example of purchasing a Volkswagen Golf v/s Volkswagen e-golf. From the slab, it’s quite clear that a person doesn’t have to pay the Carbon Dioxide Tax and NOx tax for the later vehicle over the latter one.
What Can India Implement From Norway’s EV Policy?
The EV market in India is just budding. EV companies are emerging with unique ergonomic vehicle design. EV startups are gaining momentum with funding from leading automobile manufacturers. The government of India can implement the following initiatives from the Norwegian EV policy to increase the number of EVs on Indian roads :
- Strengthening The Green Tax System in India: In 2021, The Government of India has announced a green tax for petrol and diesel vehicles that are older than 15 years and zero-emission vehicles have been omitted from the taxation. The government of India could tax vehicles based on their emission rather than age.
- Free municipal parking at various public places for the EV owners.
- No toll for EVs at the National Highways.
- Increase in the number of charging stations in urban areas.
- Fiscal compensation for the scrapping of petrol/diesel automobile when converting to the zero-emission automobile.
- Strengthening the public and private partnership in the sector of EVs.
What would be the difficulties faced by India while implementing an EV policy similar to that of Norway?
Norway is a small country as compared to India in terms of population and area. If the Government of India initiates a policy similar to that of Norway, many people would transition towards zero-emission vehicles. This sounds really a good move but it can create a lot of problems in the country’s energy sector. India has been on the transition from conventional fossil fuel-based energy sources to non-conventional sources. India is predominantly dependent on coal as its prime source of energy. Implementing an EV Policy similar to that of Norway in India would increase the number of EVs and charging stations. At present, the existing charging stations in India use the power generated from fossil fuel-based power plants. With the increase in the number of EVs and charging stations, the load on the power grids would tend to increase which could, in turn, increase the Greenhouse Gas emissions from the power sector. Norway’s EV policy would work well in India provided we have ample charging stations that have the potential to work on non-conventional sources of energy.
