Indian Oil plans ₹2 trn investment to achieve net zero carbon emission by 2046

State-run Indian Oil Corporation (IOC) aims to achieve net zero carbon emission target by 2046 and will invest ₹2 trillion in phases towards meeting the target. Speaking to reporters here after the 63rd annual general meeting of the company, the Chairman and Managing Director Shrikant Madhav Vaidya also indicated that with crude oil prices easing, the retail fuel prices may also ease going ahead.

IOC’s net zero plans encompass both Scope 1 and 2 emissions. Vaidya said that the company has made a detailed plan to implement measures for lower emissions and reaching carbon neutrality.

 “As we embark on the net-zero journey in the right earnest, we already have a well-crafted blueprint in place. It adopts a multi-pronged approach to take us gradually towards the net zero destination. We have envisaged that an investment of over ₹2 lakh crore will be required to achieve the target by the year 2046,” Vaidya said, adding that the investment would be done in a phased manner.

Noting that IndianOil has been pursuing a robust green agenda for some time now, to steer the country’s green energy transition, the CMD said that the company has is already working on several emission mitigation pathways like green hydrogen, biofuels, renewables, carbon offsetting through ecosystem restoration and Carbon Capture Utilisation and Storage (CCUS), among others.

The public sector major plans to achieve two-third of the targeted emission reduction through energy efficiency, electrification and fuel replacement efforts, while about a third of the total emission curtailment would be achieved through options such as CCUS, nature-based solutions and purchase of carbon credits.

Currently, IOC’s greenhouse gas (GHG) emission, emanating majorly from the company’s refining operations, stands around 21.5 million metric tonnes of carbon dioxide equivalent (MMTCO2e) per annum. Out of the total emissions, 96% are on account of processes like direct fuel burning for deriving energy from heat, steam, electricity and cooling, that are part of operations. These constitute the Scope-1 emissions. The balance 4% is on account of sourcing electricity from the grid which constitutes Scope-2 emissions.

Current initiatives of the company for lowering of emissions include audits of efficiency of projects are undertaken to reduce emissions, increasing adoption of natural gas in refineries in place of liquid fuels

The oil refining and retailing major is also installing 5 kilo tonnes per annum (KTPA) and 2 KTPA units of green hydrogen at its refineries and is also involved in a a carbon capture, utilization and storage (CCUS) project along with ONGC.

The company also made an investment of ₹577 crore for research and development in renewable energy, bio-energy, fuel cell, greener products among others. It is also pursuing partnerships with NTPC and L&T among others.

Its efforts would also include engaging with value chain partners to reduce emissions across current network, energy efficiency, automation, solarization in its retail network and shifting to pipelines and inland shipping from rail and road and phasing-out old fleet from fuel transport, the company showed in a presentation.

The presentation, however, showed that IOC’s carbon emission would increase till 2030 with new capacities being added and would then take a downtrend till reaching carbon neutrality till 2046.

The company has excluded Scope-3 emissions, such as end use of products, emission from product distribution and retail network its net-zero target so far.

On the stagnant petrol and diesel prices, despite volatility in global oil prices, the CMD said that it was a deliberate and calibrated decision not to increase retail fuel prices.

 “I am a PSU. As a responsible corporate...government has a holding in me. It was a conscious deliberate calibrated decision not to increase the prices,” he said.

On the outlook for retail prices, the CMD said that: “Now we see some softening of prices because, even the gas prices, whatever was there, was simply not sustainable. It will only push us into a recession. Not only us, globally. So, I think we are seeing some softening of the trends and let’s hope things normalize. Oil is something that nobody can predict.”

Fuel prices have been largely unchanged across the country over the past three months. In the national capital, petrol was sold at ₹96.72 and diesel was priced at ₹89.62 a litre respectively on Thursday.