India's clean transport shift needs a farm lens, Moody's says
Moody's says India's choice between EVs, CNG and biogas depends on power sources and farm feedstock, with crop residue a key link for transport fuels.
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what happened
Moody's argues that India's debate over electric vehicles and gas-powered transport is often framed as a fight between machines, when the real question is which energy powers a vehicle and where that energy comes from. The agency estimates electric vehicles reached about 11% of all vehicle sales in 2026, and nearly 43% of passenger three-wheelers sold in the first seven months of the year were electric. Batteries are winning for short city trips, but electric buses account for under 5% of sales and heavy trucks only 0.4%.
An EV is only as clean as the power that charges it. Coal and lignite produced roughly two-thirds of India's electricity in July to September of fiscal 2026, and officials still expect coal to generate around half the country's power in 2035–36. A TERI study compared petrol, diesel, CNG, electricity and LNG over full life cycles across six vehicle categories. It found EVs favourable for two- and three-wheelers, while CNG offered a balanced mix of cost, life-cycle performance and practicality for cars, taxis, buses and light commercial vehicles.
Compressed biogas, made by digesting crop residue, dung and organic waste, can run through the same pipelines and engines as CNG. TERI's estimate is that a 20% share of biogas mixed into CNG would bring the fuel's lifetime emissions to neutral. The northern states of Punjab and Haryana generate roughly 29 million tonnes of rice straw yearly, and a share of it is set alight. Moody's notes that existing plants run at only 20–60% of capacity because feedstock is seasonal and collection is fragmented, and suggests year-round aggregation and long-term offtake contracts could help.
why it matters
For markets, this is a long-term structural story rather than a near-term driver: India's power mix and fuel choices shape demand for coal, gas and electricity across segments. Biogas plant economics depend on steady feedstock and utilisation, which currently sits at 20–60% of capacity.
instruments
sources
- EVs, CNG and CBG: Why India’s clean mobility transition also needs an agricultural lens — Moody's, 31 October 2026 at 04:50 UTC
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