ONGC unveils Rs 2 trillion decarbonisation road map for net-zero 2038

Rs 2 trn allocated for 7 Gw of renewables, carbon capture, and green H2 plans

As part of its net-zero emissions road map, state-owned Oil and Natural Gas Corporation (ONGC) plans to offset 9 million tonnes (mt) of carbon dioxide (CO2) equivalent emissions (tCO2e) by 2038 at a total cost of Rs 2 trillion.

India’s largest oil and gas producer announced this initiative on Tuesday, making ONGC the first fossil fuel company in India to outline a detailed plan to reduce greenhouse gas (GHG) emissions over a fixed time period.

While other major Indian public sector undertakings such as Indian Oil Corporation (IndianOil), Indian Railways, and Coal India have declared net-zero targets, they have not yet released detailed plans, according to the global Net Zero Tracker portal.

The 200-page ‘decarbonisation road map’ targets the establishment of 3.89 gigawatt (Gw) of renewable energy capacity across hybrid, offshore wind, and small hydro projects in Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu, and Assam by 2029-30.

By 2037-38 (FY38), a total of 6.03 Gw of renewable capacity is envisioned to replace current captive power generation through natural gas and grid electricity.

 

The investment pipeline for these projects will amount to Rs 97,000 crore by 2030, with an additional Rs 65,000 crore and Rs 38,000 crore to be spent by 2035 and 2038, respectively.

Green hydrogen production will receive the largest share of the Rs 2 trillion projected capital expenditure, at Rs 80,000 crore, followed by offshore wind energy projects at Rs 49,000 crore, and onshore wind and solar projects at Rs 30,000 crore.

This plan will enable ONGC to offset 9 million tCO2e, or the emission by 2.1 million petrol-powered passenger vehicles driven for one year. This will address both Scope 1 emissions (direct emissions from sources under the company’s control) and Scope 2 emissions (indirect GHG emissions associated with purchased electricity, steam, heat, or cooling).

Offshore assets account for 54 per cent of ONGC’s Scope 1 emissions, while onshore assets contribute 63 per cent of Scope 2 emissions.

ONGC’s additional target of reducing 24.3 million tCO2e of Scope 3 emissions by FY38 depends on partners like GAIL (India) and IndianOil, which handle 91 per cent of such emissions through their processing of ONGC’s products.

Adopting new technologies

The road map also solidifies ONGC’s plans to adopt a range of new technologies, including carbon capture, utilisation and storage, battery energy storage systems, and electric vehicles.

The company aims to majorly increase its use of compressed biogas and expand its green hydrogen capacity.

Plans include implementing internal carbon pricing, allowing firms to calculate the cost of each tonne of CO2 equivalent emitted.

ONGC also intends to reduce operational emissions by minimising gas flaring and curtailing fugitive methane emissions.

ONGC currently produces over 1.26 million barrels of oil equivalent per day, contributing roughly 71 per cent of India’s domestic production.

Its wholly-owned subsidiary, ONGC Videsh, is the largest Indian multinational with 35 oil and gas assets in 15 countries.

In 2023-24, ONGC produced 21.14 mt of oil and 20.648 billion cubic metres of natural gas.

This road map is based on the Science Based Targets Initiative (SBTi), a collaboration between the Carbon Disclosure Project, the United Nations Global Compact, the World Resources Institute, and the World Wide Fund for Nature.

Presently, over 4,000 companies worldwide, including global oil majors like Aramco, PetroChina, Exxon, and BP, are setting emissions reduction targets under SBTi.