IOC plans to set up green hydrogen plants at all refineries by 2047; aims to achieve net zero emission

Although hydrogen is being hailed as the fuel of the future because it burns cleanly, emitting just oxygen and water, its relative cost premium over alternative fuels now restricts its use in industry.

Indian Oil Corporation (IOC) Chairman Shrikant Madhav Vaidya revealed that the company is planning to set up green hydrogen plants at all its refineries by 2047. This is part of a Rs 2-lakh crore green transition plan to achieve net-zero emissions, news agency PTI reported.

IOC is restructuring its business with a greater emphasis on petrochemicals to hedge volatility in the fuel business, while also transforming petrol pumps into energy outlets that offer EV charging points and battery swapping options in addition to conventional fuels as it strives to become future-ready, he said.

As India’s oil consumption rises from 5.1 million barrels per day to 7–7.2 million bpd by 2030 and 9 million bpd by 2040, the company is looking at plans to increase its refining capacity to 106.7 million tonnes per year from 81.2 million tonnes.

“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.

Speaking to PTI, Vaidya said the company plans to 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.

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

These expenditures include the installation of green hydrogen facilities at refineries, increased efficiency, the addition of renewable energy capacity, and the use of alternative fuels.

Hydrogen is considered to be the fuel of the future as it is seen as the cleanest known fuel that emits just oxygen and water when burned. However, it is more costly than alternative fuels and limits its use in businesses. Refineries that convert crude oil into fuels like gasoline and diesel use hydrogen to reduce the sulphur content in diesel fuel.

This hydrogen is created utilising fossil fuels such as natural gas. IOC intends to split water using electricity generated from renewable sources such as solar to produce green hydrogen.

IOC now emits 21.5 million tonnes of carbon dioxide equivalent (MMTCO2e) per year, the majority of which comes from its refining operations. After accounting for planned expansions and the emissions of its subsidiaries, this figure will climb to 40.44 MMTCO2e by 2030.

The company intends to replace liquid fuels in refineries with natural gas, as well as to replace grey hydrogen (made from fossil fuel) with green hydrogen produced from renewable energy.

IOC is also eyeing carbon offsets such as ecosystem restoration and Carbon Capture, Utilization, and Storage (CCUS), among other options.

“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.

Around 96 per cent of its current emissions are caused by operations-related processes such as direct fuel burning for heating, steam generation, power generation, and cooling. These are the emissions that fall within Scope-1. The remaining 4 per cent comes from using the grid to obtain electricity, which results in Scope-2 emissions.

Vaidya further said that IOC had developed a path to reach net zero Scope 1 and 2 emissions, referring to emissions from its crude refining processes and energy usage.

Green hydrogen is expected to account for 50 per cent of total hydrogen output in 5-10 years, and 100 per cent by 2040.

Additionally, Vaidya said that IOC wants to install electric vehicle charging stations at 10,000 gas stations during the next two years, increasing the capacity of renewable energy from 256 MW to 12 gigawatts.

The petrochemical intensity, or the percentage of crude oil transformed into chemicals, is currently low at 5-6 percent. “We intend to increase it to 10-12 per cent,” he stated.

Vaidya reiterated that the all-India average being aimed is 10–12 per cent. The company’s two more recent refineries, in Panipat in Haryana and Paradip in Odisha, have a petrochemical intensity of 15-20 per cent, which would be raised to 25 per cent.

Source : PTI