India's refineries navigate energy security and net-zero transition
Industry leaders discuss balancing growing demand with decarbonization at sustainability summit
1Refineries face dual challenge
Indian refinery executives highlighted the need to balance growing energy demand with decarbonization goals at The Hindu Sustainability Summit. CPCL's technical director explained net-zero requires reducing energy consumption while maintaining output. The sector must simultaneously ensure energy security during this transition, particularly for import-dependent India. Panelists emphasized this requires strategic planning across multiple fronts including technology, supply chains and policy frameworks.
2CPCL's efficiency improvements
Chennai Petroleum Corporation Limited has reduced energy consumption despite achieving record crude throughput. The company implemented energy conservation measures, cleaner fuels, operational optimization and digitalization. These efforts improved its energy efficiency benchmark significantly. CPCL aims to achieve net-zero Scope 1 and 2 emissions by 2046, focusing first on direct emissions and purchased electricity before tackling downstream Scope 3 emissions from product use.
3Green hydrogen challenges
While green hydrogen has moved from policy to implementation, cost remains a major barrier according to L&T's sustainability chief. Scaling electrolyser manufacturing, reducing renewable energy costs and creating demand are crucial for commercial viability. The transition requires building an entire ecosystem including renewable power, storage, electrolysers and transportation infrastructure. This comprehensive approach makes adoption complex despite the technology's promise for decarbonization.
4Renewable energy limitations
MRPL's refinery director noted renewable energy's intermittent nature poses operational challenges for refineries requiring continuous power. Process stability demands consistent feed flow incompatible with variable renewable output. Solutions include energy storage systems and electrolyser technology improvements. These technical constraints demonstrate why fossil fuels will remain necessary during the transition period, requiring a gradual shift rather than immediate replacement.
5Supply chain vulnerabilities
Geopolitical conflicts and shipping disruptions threaten crude supplies for import-dependent India, panelists warned. Such shocks highlight the need to diversify crude sources and strengthen supply resilience. Maintaining uninterrupted energy availability remains critical while transitioning. This balancing act requires careful risk management and contingency planning across the refinery sector's complex global supply networks.
6Sustainable aviation fuel progress
Refineries are developing sustainable aviation fuel projects using used cooking oil as feedstock. MRPL's director identified collection logistics and sustainability certification as key challenges. An indigenous technology SAF plant is scheduled for commissioning next year. This represents early progress in hard-to-decarbonize aviation, though significant scaling challenges remain for widespread adoption.
7Carbon credit scheme impact
Tamil Nadu Petroproducts' MD explained how the Carbon Credit Trading Scheme shifts energy efficiency from voluntary to compliance-driven. Industries face prescribed emissions-intensity targets with certificate trading for over/under-performance. While similar to BEE's PAT scheme, expanded sector coverage may increase trading activity. Better-performing companies could gain investment opportunities through efficiency certificates.
8Prioritizing cost-effective measures
Panelists unanimously agreed energy efficiency should precede expensive decarbonization technologies. The discussion emphasized a gradual transition safeguarding energy security while accelerating investments in efficiency, renewables and green hydrogen. This pragmatic approach balances immediate operational needs with long-term sustainability goals, recognizing the refinery sector's critical role in India's energy ecosystem during the transition period.