Key takeaways
➢ While the Indian oil and gas sector has shown some initiatives and ongoing projects in implementing CCUS technologies, the numbers and targets presented may not be significant enough to address the sector’s overall greenhouse gas emissions.
➢ The annual Scope 1 and Scope 2 emissions from India’s Public Sector Undertakings (PSUs) amount to approximately 50.09 million metric tons of carbon dioxide equivalent (CO2e) in the Oil and Gas sector.
➢ Total planned CCUS operations in these PSUs are approximately 470,000 tons per year by 2040
➢ Mitigation measures, however, have a much larger impact. As opposed to an estimated emissions of 67.97 MMTCO2e, the PSUs expect mitigation efforts to result in emissions of 67.47 MMTCO2e by FY2030, showing a decrease of less than one percent.
Introduction
CCUS, or Carbon Capture, Utilization, and Storage, is a suite of technologies designed to capture and store carbon dioxide (CO2) emissions from large industrial sources like power plants. It has gained global momentum as countries strive to reduce emissions from the energy sector. The process involves several steps: capture, transportation, utilization, and storage.
Capture techniques include post-combustion, pre-combustion, and oxy-fuel combustion. Post-combustion involves separating CO2 from flue gas, while pre-combustion converts fuel into a gas mixture of hydrogen and CO2. Oxy-fuel combustion burns fuel with pure oxygen, capturing the released CO2. Once captured, the CO2 is transported through pipelines or other means to utilization or storage sites.
Utilization of captured CO2 involves various applications. Enhanced oil recovery injects CO2 into oil reservoirs to boost production. CO2 can also be used in the production of chemicals, building materials, or as a feedstock for synthetic fuels. If not utilized, the CO2 is stored underground in geological formations like saline aquifers or depleted oil fields.
Source: CCUS Report, Dastur and NITI Aayog
CCUS has the potential to play a crucial role in mitigating climate change. The International Panel on Climate Change (IPCC) recognizes its importance in achieving decarbonization goals. The International Energy Agency (IEA) also identifies CCUS as one of the pillars for global energy transformation, along with renewable-based electrification, bioenergy, and hydrogen.
Current state of CCUS in the Indian Oil & Gas sector
Industry Overview
The Indian oil and gas sector holds a prominent position in the country’s energy landscape, providing crucial resources to fuel its growing economy. India, as one of the world’s largest emitters, has been making an effort to address emissions from the oil and gas industry. The sector’s emissions stem from a multitude of sources, including extraction, refining, transportation, and end-use. One notable aspect is the commitment of Indian Oil and Gas Public Sector Undertakings (PSUs) to emission reduction targets. The annual Scope 1 and Scope 2 emissions from these PSUs alone amount to approximately 50.09 million metric tons of carbon dioxide equivalent (CO2e).
Ongoing projects in Indian PSUs
Table 1: Ongoing projects in Indian Oil and Gas PSUs
*The Green Shift report, ETAC, MoPNG. **Estimated from the given numbers in The Green Shift report and assuming a plant life of 10 years. Although, it is difficult to see this number being realized.
1. Oil and Natural Gas Corporation (ONGC)
As the leading National Oil Company in the country, ONGC is fully aware of its responsibility in spearheading the energy transition and endorsing pioneering solutions such as CCUS in enhanced oil recovery, geothermal energy, and offshore wind. ONGC has established a dedicated Carbon Management & Sustainability Group to oversee all initiatives related to energy transition and emission reduction. This group serves as the central hub for coordinating activities in these areas. Additionally, ONGC has a specialized Cell within the group that is actively guiding the company’s Net Zero Strategy.
With baseline of 9.1 MMTCO2e net operational emissions in FY2021-22, ONGC aspires to achieve net zero emissions by 2050.
➢ ONGC has recently entered a Memorandum of Understanding (MoU) with Equinor, encompassing collaborative efforts in the domains of low carbon and renewable energy. The agreement focuses on various areas such as Carbon Capture Utilization and Sequestration (CCUS) possibilities, as well as ventures involving offshore wind, solar, solar-hybrid projects in India, green and blue hydrogen, and Ammonia.
➢ ONGC, in collaboration with IOCL, is actively engaged in India’s inaugural large-scale carbon capture endeavor at the Koyali refinery. In this project, the captured CO2 from Koyali will undergo treatment, compression, and transportation via pipelines to the Gandhar oil field operated by ONGC. The depleted oil field will serve as a repository for the injected CO2, facilitating both its utilization and permanent storage. As a result, the project holds the potential to increase oil production by approximately 10%. Furthermore, it is estimated that by the year 2040, the cumulative amount of CO2 sequestered through this initiative could reach approximately 5-6 million tons. This will be achieved through an annual capture of around 400,000 tons over a period of 15 years. The cost of carbon capture is estimated to be Rs 7500 per ton.
2. Oil India Limited (OIL)
With baseline of 3.77 MMTCO2e net operational emissions in FY2021-22, OIL is yet to firm up their net zero targets. But the total emissions are projected to be reduced by 15% before FY40 including various projects and capacity expansions. OIL also sees CO2 reduction of 0.27 MMTCO2e through renewable energy generation, making them carbon positive.
➢ OIL has recently signed a MoU with IOCL to undertake the capture of CO2 emissions from flue gas at the Digboi Refinery. The captured carbon will be effectively utilized for enhanced oil recovery (EOR) activities. With the EOR approach, OIL’s intent is to not only reduce emissions but also explore opportunities for improving oil recovery.
➢ Additionally, OIL has plans to capture non-associated or pure CO2 produced at BCPL, which originates from the gas received as feedstock from OIL. Furthermore, OIL has established a collaboration with the Centre of Excellence in Carbon Capture and Storage (COE CCS) at IIT Bombay to engage in research and development initiatives in this field, suggesting their proactive approach to explore innovative solutions in mitigating carbon emissions.
3. Indian Oil Corporation Limited (IOCL)
In the fiscal year 2022, IOCL (as a standalone entity) recorded a total emission of 21.54 MMTCO2e, primarily stemming from its refinery and petrochemical business, accounting for approximately 97% of the total emissions. Among these emissions, Scope 1 emissions constituted 96.5%, while Scope 2 emissions made up 3.5%. When considering IOCL’s subsidiary, Chennai Petroleum Corporation Limited (CPCL) refinery located in Chennai, the emissions for the IOCL Group exceeded 24 MMTCO2e. With planned expansions in the pipeline, IOCL’s emissions are estimated to surpass 40 MMTCO2e by the fiscal year 2030.
➢ IOCL is currently engaged in several initiatives, the most significant being a collaboration with ONGC on a substantial project valued at 45 billion. This project focuses on capturing CO2 emissions from IOCL’s Gujarat Refinery and entrusting ONGC with the tasks of transportation and carbon sequestration. Considering the projected cost and scale, it is estimated that around 5-6 million tons of carbon could potentially be captured by 2040. However, it is important to note that this cumulative amount represents merely 1.6% of IOCL’s total annual emissions, which is a relatively small proportion.
➢ IOCL is making an investment of Rs. 6-10 billion in additional projects at Panipat and Paradip. Assuming a carbon capture cost of Rs. 7500 per ton, the projected carbon capture in these projects would be approximately 0.8-1.3 MMTCO2e. This highlights the significant scale of IOCL’s efforts in capturing and mitigating carbon emissions.
➢ IOCL has devised a dual approach to achieve a net-zero footprint by 2046. The company has determined that over 50% of its current emissions i.e., 10.77 MMTCO2e, can be reduced through initiatives focused on process efficiency, fuel replacement, and gridification. As for the remaining 40% or more of its emissions, IOCL aims to address them through the adoption of carbon-negative technologies like CCUS (Carbon Capture, Utilization, and Storage), along with tree plantation efforts. Based on our estimates and considering the combined efforts of both projects, IOCL has the potential to capture approximately 5.8-7.3 MMTCO2e by 2040 through CCUS technology.
4. Bharat Petroleum Corporation Limited (BPCL)
BPCL’s GHG inventory amounted to 7.2 MMTCO2e in FY2021-22. The primary sources of emissions included DG sets, fire engines, company-owned vehicles, process stacks, power purchase from third parties (SEB, private entities), and emissions generated during production processes in refineries, petrochemicals, and marketing operations. Among these emissions, Scope 1 accounted for 92.7%, and Scope 2 accounted for 7.3%. Without mitigation measures, it is projected that the GHG inventory will increase to 12.4 MMTCO2e by FY30 due to various projects and capacity expansions.
In response to these projections, BPCL has set a target to reduce emissions from 12.4 to 9.8 MMTCO2e by FY30 and ultimately achieve net-zero emissions by FY40.
➢ BPCL has set its sights on implementing Simulated Moving Bed Absorption (SMB) technology for CCUS. The company plans to conduct lab-level pilot trials by March 2024 and aims to implement the technology in its refineries by March 2026. Compared to other technologies, SMB offers several advantages, including excellent heat integration, significantly lower energy requirements (10-25 times less), and a notable reduction in capture costs (50-70%). This advanced approach showcases their commitment to adopting efficient carbon capture methods.
➢ In addition to SMB, BPCL is actively supporting the scale-up of CO2 to methanol/DME (Dimethyl Ether) technology developed by Breath Applied Science Pvt Ltd, a start-up incubated at JNCSAR in Bengaluru. Pilot plant trials conducted in April 2021 demonstrated promising results, achieving a CO2 conversion rate of 29.5% with methanol selectivity ranging from 40% to 45%.
➢ BPCL’s CRDC (Corporate Research and Development Centre) is also working on the development of a Solid Oxides Electrolyzer Cell (SOEC)-based co-electrolysis process for converting CO2 and H2O into syngas. The subsequent conversion of syngas will produce green methanol. Lab-scale trials for this process are scheduled for June 2024, with refinery implementation targeted by March 2026.
5. Hindustan petroleum corporation limited (HPCL)
In FY22, HPCL recorded a GHG inventory of 3.98 MMTCO2e for Scope 1 and Scope 2 emissions. These emissions were primarily attributed to fuel combustion in furnaces, boilers, IC engines, hydrogen generation, flaring from refinery operations, and purchased electricity consumption. Scope 1 emissions accounted for 83.9% of the total emissions, while Scope 2 accounted for the remaining 16.1%. Based on business-as-usual projections and capacity expansions, it is estimated that the GHG inventory will increase to 10.1 MMTCO2e by FY40.
To address these projections and contribute to global decarbonization efforts, HPCL has set a target to achieve net-zero emissions for both Scope 1 and Scope 2 by the year 2040. This ambitious goal signifies the company’s commitment to mitigating its environmental impact and transitioning to a carbon-neutral operation. By implementing various measures, such as adopting cleaner technologies, enhancing energy efficiency, and exploring renewable energy sources, HPCL aims to reduce its emissions significantly and play a vital role in combating climate change.
➢ HPCL has outlined its plans to construct a CO2 capture unit with a capacity of 24,000 tons per annum (KTPA) in Visakh. This project, utilizing in-house research and development technology, is estimated to cost around Rs.170 million. The primary objective of this unit is to capture carbon dioxide (CO2) from the off-gas generated by the HGU reformer. The construction of the CO2 capture unit is expected to be finished by December 2023, marking an important milestone in HPCL’s efforts to reduce its carbon footprint and mitigate greenhouse gas emissions.
6. Gas Authority of India Limited (GAIL)
In FY22, GAIL, the Indian natural gas company, recorded a GHG footprint of 4.5 MMTCO2e. The majority of these emissions, approximately 56%, were attributed to the use of natural gas as fuel. Among the total emissions, 89% were categorized as Scope 1 emissions, directly generated by GAIL’s operations, while the remaining 11% fell under Scope 2 emissions, resulting from purchased energy sources. Looking ahead, GAIL projects its emissions to increase to 5.47 MMTCO2e by the fiscal year 2040, considering various planned projects and capacity expansions.
Demonstrating their commitment towards sustainability, GAIL has embarked on a net-zero journey through a science-based ambition and action plan aligned with the Government of India’s vision. Their target is to achieve a net-zero status for Scope 1 and Scope 2 emissions by 2040.
GAIL, in its pursuit of achieving net-zero emissions, has recognized CCUS as a strategic pillar. The company is actively engaged in identifying viable CCUS technologies to support its sustainability goals. GAIL has shown a strong interest in low-carbon technologies and processes that involve the conversion of CO2 into valuable chemicals or the fixation of CO2.
➢ To explore these opportunities, GAIL’s Research and Development (R&D) department has partnered with prestigious institutions in India to conduct feasibility studies and develop technologies for various processes. Collaborations include working with IIT-Delhi on the conversion of CO2 to Methanol and DME (Dimethyl ether), collaborating with IISER-Tirupati on CO2 to Polycarbonate Diol, and partnering with IIP Dehradun on CO2 to Syngas.
➢ In addition to these technologies, GAIL has initiated a pilot project in association with the Central Institute of Mining and Fuel Research (CIMFER), Dhanbad. This project aims to fix CO2 using microalgae in open raceway ponds at the Pata petrochemical complex. Trial runs have commenced, utilizing suitable microalgae strains to explore the effectiveness of this method.
➢ GAIL’s proactive approach towards CCUS and its collaborations with esteemed institutions showcase its commitment to finding innovative solutions for reducing CO2 emissions and exploring the valorization and fixation of CO2. By leveraging expertise and resources from these partnerships, GAIL demonstrates its commitment to developing sustainable solutions and driving the transformation of CO2 emissions into useful and economically viable resources.