India’s top oil firm Indian Oil Corporation (IOC) will set up green hydrogen plants at all its refineries as it pivots a Rs 2-lakh crore green transition plan to achieve net-zero emissions from its operations by 2046, its chairman Shrikant Madhav Vaidya said.

Indian Oil Corporation (IOC) is remodeling business with an increased focus on petrochemicals to hedge volatility in the fuel business, while at the same time turning petrol pumps into energy outlets that offer EV charging points and battery swapping options besides conventional fuels as it looks to make itself future-ready, he said.

The company intends to expand its refining capacity to 106.7 million tonnes per annum from 81.2 million tonnes as it sees India’s oil demand climbing from 5.1 million barrels per day to 7-7.2 million bpd by 2030 and 9 million bpd by 2040.

“Oil will continue to be a mainstay fuel for the next few years but we are preparing for transition which will involve a combination of green hydrogen, biofuels, EVs and alternate fuels,” he said.

Hydrogen — the cleanest known fuel that discharges only oxygen and water when burnt — is being touted as the fuel of the future, but its relatively higher cost then alternate fuel currently limit its usage in industries. Refineries, which turn crude oil into fuel such as petrol and diesel, use hydrogen to lower the sulfur content of diesel fuel.

This hydrogen is currently produced using fossil fuels such as natural gas. IOC plans to use electricity generated from renewable sources such as solar to split water to produce green hydrogen.

Vaidya said the company will set up a 7,000 tonnes per annum green hydrogen producing facility at its Panipat oil refinery at a cost of Rs 2,000 crore by 2025.

“We are starting with Panipat but eventually all refineries will have green hydrogen units,” he said.

This is part of the company’s target of achieving net-zero emissions from operations by 2046.

“We plan to invest over Rs 2 lakh crore to achieve net-zero,” he said.

These investments cover setting up green hydrogen facilities at refineries, improving efficiency, renewable energy capacity addition and alternate fuels.

Currently, IOC’s greenhouse gas (GHG) emission, emanating majorly from the company’s refining operations, is 21.5 million tonnes of carbon dioxide equivalent (MMTCO2e) per annum. This will rise to 40.44 MMTCO2e by 2030 after considering the expansions planned and taking the emissions of its subsidiaries into account.

The company plans to use natural gas in refineries in place of liquid fuels as well as replace grey hydrogen (produced from fossil fuel) with green one that is manufactured from renewable power.

IOC is also looking at carbon offsetting through ecosystem restoration and Carbon Capture Utilisation and Storage (CCUS), among others.

“We plan to achieve two-thirds of emission reduction through energy efficiency, electrification and fuel replacement efforts, while about a third of the total emission would be mitigated through options such as CCUS, nature-based solutions and purchase of carbon credits,” he said.

Out of its current emissions, 96 per cent are on account of processes like direct fuel burning for deriving energy from heat, steam, electricity and cooling, which are part of operations. These constitute the Scope-1 emissions. The balance 4 per cent is on account of sourcing electricity from the grid which constitutes Scope-2 emissions.

Vaidya said IOC had prepared a roadmap to achieve net zero Scope 1 and 2 emissions – that is, emissions produced from its crude refining operations and energy consumption.

It plans for green hydrogen to account for 50 per cent of its overall hydrogen output in 5-10 years and 100 per cent by 2040.

Vaidya also said IOC plans to raise renewable energy capacity to 12 gigawatts from current 256 MW, and would have electric vehicle charging facilities at 10,000 fuel stations in two years.

The petrochemical intensity – the percentage of crude oil converted into chemicals- is low at 5-6 per cent currently. “We intend to take it up to 10-12 per cent,” he said.

The firm’s newer refineries at Panipat in Haryana and Paradip in Odisha have the petrochemical intensity of 15-20 per cent, which would be raised to 25 per cent, he said, adding the all-India average being targeted is 10-12 per cent.