Indian Oil Corporation (IOC) has floated a new subsidiary for low carbon, clean and green energy business as the nation’s biggest oil refining and fuel marketing company pivots a transition plan to achieve net-zero emissions from its operations by 2046.
In a stock exchange filing, IOC said its board at the meeting held on March 14 “has accorded approval for the formation of a Wholly-owned Subsidiary (WoS) in India to operate in the domain of low carbon, new, clean and green energy businesses”.
The move is aimed at consolidating all existing green assets under one umbrella and rapidly expanding its footprint across sustainable energy avenues like biofuels, renewables, green hydrogen and carbon offsets (CCUS or carbon capture, utilisation and storage).
Alongside being the nation’s largest producer of traditional fuels like petrol, diesel and LPG, IOC is targeting 200 GW of renewable energy capacity by 2050 as well as 7 million tonnes of biofuels (oil produced from biomass) and 9 million tonnes of biogas (gas generated from decomposed plant and animal waste).
A company statement quoted IOC Chairman Shrikant Madhav Vaidya as saying that while the company is committed to energising India’s exponentially rising energy needs, it is also determined to be the flag bearer of the country’s green energy transition.
“We are thus scaling up our green endeavours with a definitive focus, and going forward, we will consolidate our green assets under one umbrella for better synergy,” he said.
IOC is remodelling its 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.
Also, the company plans to set up green hydrogen plants at all its refineries as part of a ₹2 lakh crore green transition plan to achieve net-zero emissions from its operations by 2046, he said.
IOC, which currently has a renewable energy portfolio of 239 MW, is collaborating with NTPC to augment generation of electricity from solar, wind and other renewable sources by around 2.8 GW.
It is also greening the supply chain through solarising 20,705 petrol pumps with an installed capacity of 121 MW. It will set up 4,700 EV charging stations and 66 battery swapping stations and is working with Israeli startup Phinergy to explore manufacturing lithium-ion and aluminium-air battery systems.
The statement said the company has firmed up collaboration with ReNew Power and Larson & Toubro Limited for green hydrogen business.
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 than alternate fuel currently limits its usage in industries. Refineries, which turn crude oil into fuel, such as petrol and diesel, use hydrogen to lower the sulphur 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 like 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 ₹2,000 crore by 2025 and similar units will come up at other refineries as well in due course of time.
The ₹2 lakh crore investment planned to achieve net-zero covers the cost of setting up green hydrogen facilities at refineries, improving efficiency, renewable energy capacity addition and alternate fuels.
