Promote LPG for household cooking in developing countries

The Indian government recently approved slashing Liquefied Petroleum Gas (LPG) cylinder prices by Rs 200 for all consumers. For beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY), this discount will be on top of their existing subsidy of Rs 200, further pushing down the net price of a cylinder to Rs 710. The price revision was much needed to boost LPG demand among PMUY beneficiaries. The scheme, launched in 2016, is the blue-flame revolution of modern India and has enabled over nine crore beneficiaries to access LPG for domestic cooking leading to near-universal access to LPG. However, access does not automatically guarantee use.

The recent National Health and Family Survey-5 indicates that about four of every 10 households still depend primarily on burning solid fuels like firewood in traditional chulhas to meet their cooking energy needs. A family of five typically requires seven to nine (14.2 kg) LPG cylinders every year, but on average, PMUY beneficiary households used less than four cylinders in the financial year 2022-23. Past studies have pointed out that LPG price is the main barrier to transitioning away from solid fuels like firewood. Hence, it is not easy for either the poor to buy LPG even after price reductions, or for the government to subsidise it further.

This situation is not unique to India. Consumers and governments in several countries across Asia, Africa, and Latin America are facing a similar dilemma of competing needs. Many consumers don’t see value for LPG at the prevailing price while governments find it challenging to subsidise LPG. This has consequences. Each year, about 3.2 million global premature deaths are attributed to household air pollution caused by due to solid fuel burning. The annual overall health, environment, and societal impact of cooking with solid fuels is estimated to be $2.4 trillion (2.5 per cent of the global GDP).

As renewable energy-based solutions become technologically mature and comparatively affordable, LPG is being widely considered a transition clean-cooking fuel that is most scalable across these developing nations. There is a case for the upcoming G20 leadership summit to deliberate on how to make LPG more affordable for 2.4 billion people currently dependent on solid fuels without an additional burden on the exchequer in developing economies.

Notably, India’s Minister of Petroleum and Natural Gas recently committed to “utilise the G20 presidency to give resonance to the voice of the Global South and to highlight the common concerns of energy security, energy justice, sustainable energy transition so that all developing countries can gain reliable and clean energy”.

Tackling a trilemma – health, development, and environment

In addition to the well-known health and developmental impacts of the transition from firewood to LPG for cooking, there is also an environmental case for it, despite being a fossil fuel. If more trees are harvested for firewood than planted, the greenhouse gases (GHGs) emitted during firewood burning contribute to climate change.  In CEEW-CSIR-NEERI’s recent policy brief, ‘Promoting the Use of LPG for Household Cooking in Developing Countries’, we found that one LPG cylinder provides the same cooking energy as burning 178 kg of firewood in a traditional chulha. This is how LPG use checks forest degradation.

Firewood burning also emits short-lived climate pollutants (SLCPs) such as black carbon, which exacerbate climate change. We estimate that a complete transition from firewood to LPG could lead to 41 per cent reduction in cooking-related CO₂ equivalent greenhouse gas emissions (GHG) globally based on the estimation that 30 per cent of firewood is unsustainably harvested.

What the G20 could do

G20 economies together account for 80 per cent of global greenhouse gas emissions, and 85 per cent of the global GDP. These economies have the political heft to streamline the global carbon market to include LPG for domestic cooking as a priority sector (premium) given the co-benefits. Going the ‘carbon credit for LPG’ way reduces the financial burden on governments too. Moreover, transitioning away from firewood furthers the United Nations’ Sustainable Development Goals (SDG) related to affordable and clean energy, gender, environment, and public health.

The actual country- or state-level carbon credit benefit will depend on the level of unsustainable harvesting of firewood, the assumed climate impact of GHG and SLCPs, and the carbon price premium given the significant health and societal co-benefits beyond climate. For example, in India, oil marketing companies can convert PMUY LPG into a carbon credit project under the carbon market mechanism, and pass on the carbon credit income as an additional discount to the consumers after adjusting for the costs involved in project development, monitoring, and verification. It will make LPG use more affordable for the poor without additional burden on the governments of developing economies. In FY 2022-23, PMUY households could have cumulatively received between Rs 610 crore (GHG) and Rs 4,472 crore (GHG +SLCPs) worth of carbon credits based on state-wise domestic LPG sales and sustainable firewood harvest estimates, assuming a conservative price of USD 9 per unit of carbon credit.

Some G20 countries such as India and Indonesia have made extraordinary efforts to scale up LPG access in recent years. G20 could facilitate and support a knowledge-sharing system between countries like India and those interested in scaling up LPG access in the spirit of facilitating South–South cooperation. It would allow developing economies to not spend scarce resources on reinventing the wheel by emulating the invaluable lessons around consumer awareness and distribution of LPG learnt in other countries.

END OF ARTICLE