India Refiners Brace for Low Carbon Future

India’s biggest oil refiners are finalizing plans to cut down on emissions from their facilities while remaining optimistic about the future of petroleum fuels in the country.

State-run majors from Indian Oil Corp. to Hindustan Petroleum Corp. are opting for low-carbon operations with the use of green hydrogen and clean power. They are also installing thousands of electric vehicle charging points across the country even as they expect gasoline demand to remain robust for some years.

“Fossil fuels will continue to play a dominant role as India’s overall energy pie is increasing,” Shrikant Madhav Vaidya, chairman of Indian Oil, the nation’s biggest refiner-cum-fuel retailer, said on Wednesday. Renewables will not “be displacing fossil fuels, but will be supplementing and complementing India’s energy basket.”

The comments follow Prime Minister Narendra Modi’s surprise commitment at the Glasgow climate talks to make India a net-zero carbon-emitting nation by 2070, and a range of other targets that would potentially demand a massive revamp in the country’s energy use.

“Net-zero can be achieved in various ways, one of them will be carbon capture at the refineries,” Vaidya said, adding that the company will soon announce a roadmap toward that end. “I don’t think net-zero comes in the way of refinery expansions.”

The company plans to spend $13 billion to increase its crude processing capacity by a third over the next five years to increase production of gasoline and diesel, along with petrochemicals.

Energy shortages the world over, caused by squeezed supplies of fossil fuels like coal and natural gas, are a reminder that a shift away from carbon can’t happen in haste.

“While newer forms of energy will find their place depending on the convenience, adaptability, and technology, in the meantime, we will have to ensure that the cost and economies don’t get into a disruption,” according to Mukesh Kumar Surana, chairman of state-run Hindustan Petroleum Corp.

He doesn’t expect India’s oil demand to peak before 2040 even as all other forms of energy slowly and gradually find their place to cater to the increasing demand.

Private sector refiner Reliance Industries Ltd., controlled by billionaire Mukesh Ambani, has voiced plans to curb production of conventional fuels and focus more on petrochemicals, besides rolling out a $10 billion investment plan to manufacture hardware for clean energy.

Source: Bloomberg