India is on the right path towards energy sustainability for future

Of late, Indian industry has made important progress on energy transition and emissions reduction. However, if long term sustainable growth is to be achieved in combination with global ambition to address climate change, more fundamental changes will be required to reduce emissions. Mr Gurmeet Singh, Director General of Federation of Indian Petroleum Industry (FIPI), in an exclusive interview with Future Fuels shares the challenges ahead for Oil Marketing Companies (OMCs) in India and how they are getting ready for the decarbonisation.

Q. What is the role of FIPI in the decarbonisation efforts?

Federation of Indian Petroleum Industry (FIPI) is an apex Society of entities in the hydrocarbon sector and acts as an industry interface with Government and regulatory authorities. It supports the Government in resolution of issues and evolution of policies and regulations. The Federation of Indian Petroleum Industry firmly believes in evidence-based policy advocacy. Over the last few years, FIPI has successfully engaged itself in studies and seminars aimed towards responsible used of fuels, clean energy and decarbonisation. 

FIPI has been engaged into various knowledge seminars and studies to discuss the pathways towards energy transition. FIPI undertook studies such as:

• Gas Roadmap Vision 2030: The study was undertaken to chart pathways for moving towards a gas-based economy, reducing the use of polluting fuels and increasing the share of Natural Gas in India’s energy mix from the present 6.5 per cent to 15 per cent.
• Natural Gas for Power Generation: This study proposed various routes for mainstreaming of natural gas in power generation mix and reducing dependence on coal.
• FIPI also undertook studies such as study on Impact of Electric Mobility on India’s Oil & Gas sector and LNG as a fuel for long distance transportation to evaluate the decarbonisation options in the mobility space.
• FIPI is currently undertaking studies on – Role of Natural Gas in mitigating industrial air pollution and emerging Hydrogen markets in India. These studies are also targeting promotion of clean fuels which will be key for decarbonisation.

Few of the key clean energy and decarbonisation related events & webinars organised by FIPI include:

FIPI in association with Scottish Development International (SDI) organised an exclusive webinar on ‘Energy Transition- CCS & Hydrogen in 2021 to understand understanding the new and emerging clean energy technologies especially CCS and Hydrogen.

The Energy Forum and FIPI under the aegis of Ministry of Petroleum & Natural Gas, organised a half day round table event on the topic- “Developing a Hydrogen ecosystem for a Decarbonised Globe”. This session was organised to study and explore the challenges and pathways to hydrogen becoming a clean and abundant source of energy that could help tackle the pressing sustainability issue that confronts the world today.

FIPI on behalf of industry members had conducted an interactive session with MoP&NG to discuss possibility of utilisation of gas in power sector. Suggestions were made by FIPI to MoP&NG for increasing share of natural gas in India’s primary mix.

FIPI in collaboration with Platts convened a knowledge sharing session on Carbon Credit and Intensity. The session covered detailed analysis on aspects related to voluntary carbon credits, carbon market assessments, carbon pricing methodology, carbon offset trades etc

Further, FIPI is planning to organise the Annual Convention of its Student chapters for the year 2021-22 towards end of March 2022.  The theme for this year is “Enhancing the Energy Value Chain through Innovation and Digital Ecosystem” and will discuss topics related to energy efficiency and innovation techniques.

Q. Recently after COP26 climate summit at Glasgow, the approach to move on the path of decarbonisation has gained impetus from several sectors. So, can India achieve Net zero target by 2070 in oil sector?

India’s announcement that it aims to reach net zero emissions by 2070 and to meet 50% of its electricity requirements from renewable energy sources by 2030 is a hugely significant moment for the global fight against climate change.

The clean energy transition in India is already well underway as it has achieved its commitment made at COP 21- Paris Summit by already meeting 40% of its power capacity from non-fossil fuels- almost nine years ahead of its commitment and the share of solar and wind in India’s energy mix have grown phenomenally.

Further, Government has laid down various initiatives like One nation one grid, National Hydrogen mission, Ethanol blending programme, SATAT (bio gas) scheme, Ujjwala Yojna, FAME (EVs) scheme etc to ensure efficient, sustainable and clean energy system for India in future.

To achieve net zero emission by 2070, many Indian oil and gas companies have already stated plans to cut carbon emissions and are actively pursuing it. Companies are reviewing its strategies and supply chain to compete in the new market dynamics. They have responded in many ways like:

1. Diversifying business models to capture opportunities around electrification, electric mobility, coal-to-gas switching or lower GHG-intensity oil and gas as a complement to renewables.
2. Supporting the decarbonisation technologies including carbon capture, utilisation, and storage (CCUS); methane efficiency; and hydrogen.
3. Adopting climate-focused Environment Social Governance (ESG) principles into business models;

Thus, with widespread use of renewable energy sources, led by solar power, and other low-cost solution in the form of alternate fuels including- electric fuel, ethanol, hydrogen, methanol, natural gas (CNG/LNG) etc, India is on the right path towards energy sustainability for future.

Q. What impact does decarbonisation have on the oil sector business?

India’s per-capita energy consumption is about one-third the global average, creating the need to invest in building a wide variety of fuels to meet the anticipated growth in consumption.

• With rising energy consumption base and progressing towards energy transition, oil and gas industry will remain a vital part of the global energy mix by adopting and positioning itself to provide lower carbon energy products to consumers around the world.
• To achieve decarbonisation, there will be great dependence on domestic clean energy resources, such as biofuels, and moving into energy products, such as green hydrogen.
• The target to achieve 20% ethanol blending with gasoline to 2025 from the previous target year of 2030 will help in reducing import dependence on crude oil. The country is already one of the world’s largest producers of modern bioenergy and has big ambitions to scale up its use across the economy.
• Further, accelerating the gas initiative in line with the aim to raise the share of gas in the overall energy mix to 15% by 2030 from the current level of 6%, would also mean initiatives to boost country’s city gas distribution network in order to expand the use of cooking fuels, as well as initiatives such as LNG trucking.
• Also, many refiners are looking towards clean source of opportunities emerging in low-carbon markets, including renewable power, bioenergy, next-generation mobility, energy services, and hydrogen.

Thus, oil sector business will adapt and bring in synergies with the low carbon fuel technologies to position itself in the energy transition scenario.

Q. India is planning to introduce 20% ethanol -blended petrol (E20) from 2025, will it benefit the country go green and depend less on oil imports?

The government of India’s target for 20 % ethanol blending in petrol to 2025 is aimed at reducing the country’s oil import bill and carbon dioxide pollution. This initiative is also part of measures to improve energy security and self-sufficiency measures.

According to Niti Aayog reports, immense benefits can accrue to the country by 20% ethanol blending by 2025, such as saving Rs. 30,000 crore of foreign exchange per year in terms of crude oil imports, lower carbon emissions, better air quality, energy security, and self-reliance. 

Further, the use of ethanol-blended petrol reduces emissions of some regulated pollutants such as carbon monoxide, hydrocarbon, and nitrogen and can help in complete combustion.

These biofuels can thus be environmentally friendly as well as sustainable energy sources and can help generate employment, promote Make-in-India, doubling of farmers’ incomes and promote Waste to Wealth generation.

This initiative also goes with the Prime Minister’s Atmanirbhar Bharat initiative. It reduces the country’s dependence on imported crude oil, and consumes our own produced environment-friendly fuel.

Q. What is OMCs expectation from Govt to support to adopt green fuels?

With the shift toward clean and renewable sources of energy, India’s oil and gas companies must add capacity to meet growing demand for traditional sources while also adapting the pace of the transition to cleaner sources of energy.

Government’s initiatives in the field of Compressed Bio Gas- Sustainable Alternative Towards Affordable Transportation (SATAT), EVs (FAME policy), National Hydrogen Mission, ethanol blending gasoline programme, will help in reducing India’s import dependency improving India’s energy security and move towards energy sustainability.

In the road transport segment, mobility sector is heavily reliant on oil and contributes to almost half of India’s oil demand. A green transformation of mobility will need a shift to encourage sustainable fuels (biofuels, CNG, LNG), electrification and hydrogen-based heavy mobility in the long term.

Conducive policies will play a key role adoption of clean fuels by consumers. The Government has been bringing out new policies for quicker adoption of clean fuels. The Oil & Gas companies will look forward to stability in policies and clear guidance from the Government on the way forward.  

Tags: Decarbonisation, FIPI, Natural Gas, Oil and Gas companies, OMCs, Vision 2030