By Preeti Wadhwa
For years, the oil and gas (O&G) sector has been central to global economic growth. However, as a significant source of greenhouse gas emissions, the sector is now prioritising the decarbonisation of its operations. Indian O&G companies, in particular, are rising to the challenge by diversifying their energy portfolios and proactively investing in clean energy initiatives. They are integrating solar, wind and hydropower into their operations, adopting green hydrogen and compressed biogas (CBG), and exploring technologies such as carbon capture, utilisation and storage (CCUS). These companies are not only reducing their own emissions but are also contributing to national energy security by reducing dependence on imported fossil fuels. Indian public sector O&G majors are positioning themselves as leaders in this transition. Renewable Watch delves into the decarbonisation initiatives of three key public sector O&G companies – GAIL (India) Limited, Indian Oil Corporation Limited (IOCL) and Oil and Natural Gas Corporation Limited (ONGC).
GAIL
GAIL India Limited is a state-owned natural gas processing and distribution company. Overall, the public sector undertaking (PSU) is committed to increasing the share of natural gas in India’s energy mix from 6.7 per cent to 15 per cent by 2030, a target set by the Indian government. GAIL has made significant strides in expanding its natural gas network. According to its sustainability report for FY 2023-24, the company extended its pipeline network by approximately 2,300 km, reaching a total of 16,243 km across India. The company, together with its 15 city gas distribution entities, has established 201 CNG stations spanning 72 geographical areas across 17 states. In addition, GAIL has begun blending hydrogen with natural gas in its CGD network, with joint ventures in Indore that blend 5 per cent hydrogen into piped natural gas (PNG) and 2 per cent into CNG. GAIL produces green hydrogen at its Vijaipur plant, which was commissioned in May 2024. It produces 4.3 tonnes per day (tpd) of hydrogen with 99.999 per cent purity using proton exchange membrane electrolyser units.
GAIL has established an ambitious decarbonisation road map, targeting net zero emissions through the complete elimination of Scope 1 and 2 emissions by 2035, alongside a 35 per cent reduction in Scope 3 emissions by 2040, measured against the baseline year of 2020-21. The company has committed to substantial investments in renewable energy, with plans to develop 3 GW of capacity by 2030. This commitment is backed by a planned investment of Rs 60 billion in renewable energy during 2022-25, with Rs 6.85 billion already invested by 2022-23.
The company’s current renewable energy portfolio stands at 135 MW, comprising 118 MW of wind and 17 MW of solar power. GAIL continues to expand its green footprint, with ongoing projects including a 170 MW wind power project in Maharashtra and a 10 MW solar photovoltaic plant in Madhya Pradesh.
GAIL’s commitment to clean energy extends to CBG production as well, with plans to establish 26 CBG plants nationwide. In this space, GAIL’s joint venture with TruAlt Bioenergy will develop 10 plants capable of producing 33 million kg of CBG annually. The company is also addressing agricultural waste management through its partnership with the Punjab Energy Development Agency, establishing 10 CBG plants to process 0.5 million tonnes of paddy straw annually. In Karnataka, the PSU is investing Rs 4.5 billion to set up 100 tpd CBG plants across 15 districts.
IOCL
IOCL, established in 1959, operates across sectors including petrochemicals, gas, oil and refining, as well as emerging fields such as nanotech, solar, bioenergy and hydrogen. According to IOCL’s sustainability report for FY 2023-24, it has set a strategy to achieve net zero operational emissions by 2046, supported by an investment of over Rs 2.5 trillion. This will lead to 0.7 billion metric tonnes of emission reduction by 2046. Additionally, it aims to lower Scope 1 and 2 emissions through more investment in carbon markets, CBG, green hydrogen, renewable energy, energy efficiency and CCUS. IOCL’s current renewable energy portfolio is 246.94 MW, with targets for 2030 such as 31 GW of renewable energy, 4 million metric tonnes (mmt) of biofuels and 1 mmt of biogas. These targets will expand steadily by 2050, aiming for 200 GW of renewable energy and 9 mmt of biogas.
The company has made progress in alternative fuels, developing an 86.8 thousand metric tonnes per annum sustainable aviation fuel plant in Panipat. In addition, it achieved a 16 per cent ethanol blending target and introduced Ethanol 100 fuel across 400 outlets. Under the Sustainable Alternative Towards Affordable Transportation initiative, the company has expanded its CBG retail brand, Indigreen, commissioning 31 CBG plants and establishing 85 retail outlets by March 2024. It has established a biogas plant with a production of 200 tpd in Gorakhpur, utilising agricultural crop residue. This initiative resulted in an annual CBG generation of approximately 7,000 tonnes. Moreover, the company entered into an MoU with Tezpur University in January 2023 to promote the adoption of CBG in northeast India. A CBG plant with a production capacity of 100 tpd utilising cattle dung, has been established at the Hingonia Cattle Rehabilitation Centre in Jaipur, Rajasthan, to power the kitchens of the Akshay Patra Foundation, ensuring meals for schoolchildren.
In the green hydrogen space, IOCL’s pilot projects include the launch of India’s first green hydrogen fuel cell buses and the establishment of dispensing stations. It currently operates 15 hydrogen fuel cell buses. In addition, IOCL has partnered with ReNew and Larsen & Toubro to strengthen India’s green hydrogen ecosystem. It has also established a new joint venture company, GH4India, dedicated to developing green hydrogen production assets and associated renewable energy infrastructure. Going forward, it plans to set up green hydrogen plants across all its refineries.
IOCL operates over 10,000 electric vehicle charging stations and 100 battery swapping stations nationwide. The company is actively exploring ways to install charging stations at airports and other popular tourist locations in order to increase their availability. IOCL has partnered with cab aggregators, power suppliers and automakers to set up battery swapping stations and charging stations at its retail outlets. The company is also fostering strategic partnerships, collaborating with Panasonic Energy for lithium-ion cell manufacturing, as well as with Sun Mobility for battery-swapping infrastructure.
ONGC Limited
ONGC is the largest crude oil and natural gas company in India. It is focusing on diversifying into renewable energy sources, exploring various opportunities in not just renewables but also green hydrogen and its derivatives.
According to ONGC’s decarbonisation road map, the company aims to invest Rs 1 trillion to establish a renewable energy capacity of 10 GW by 2030. ONGC has aligned itself with India’s clean energy aspirations, targeting net zero Scope 1 and 2 emissions by 2038. It has signed agreements to develop renewable energy projects, including a 5 GW project in Rajasthan.
In January 2024, ONGC received approval from the Ministry of Petroleum and Natural Gas for the formation of a wholly owned subsidiary company for gas business and clean energy projects. In February 2024, ONGC partnered with NTPC Green Energy Limited to develop offshore wind projects and storage solutions. It also collaborated with EverEnviro Resource Management to establish 15 CBG plants. In May 2024, ONGC formed a joint venture with EverEnviro to develop 10 CBG plants, enhancing domestic renewable energy production and reducing reliance on imported gas. In December 2024, ONGC and Power Grid Corporation of India Limited collaborated to identify commercial opportunities in the green hydrogen value chain. These initiatives align with ONGC’s vision of diversifying into renewable energy, green hydrogen and green ammonia to achieve its sustainability goals.
Challenges and the way forward
Despite the momentum of key O&G companies, several challenges are likely to hinder future prospects. These include significant initial capital investments required for clean initiatives and technology hurdles in retrofitting existing pipeline infrastructure to incorporate green hydrogen and CBG blending. Globally, another key concern is the greenwashing by O&G majors, as their clean energy initiatives often focus on reducing indirect emissions rather than addressing core emissions from oil and gas extraction and production. It is commendable that, despite being a developing country with per capita energy consumption well below the global average, Indian O&G PSUs have embraced the responsibility to decarbonise their operations. Sustaining this momentum will be key for achieving India’s climate goals.
