India’s upstream oil industry needs to turn operationally carbon neutral using carbon capture, utilisation and storage (CCUS) technology, Additional Secretary (E&CVO) for Petroleum & Natural Gas Amar Nath said on Tuesday.

Upstream companies will face tremendous pressure even as the Centre seeks new investment in the sector to reduce India’s burgeoning crude import dependency, Nath said at a webinar organised by FICCI.

“To mitigate this challenge, CCUS is one of the key areas we must focus on. We have the capacity to develop this technology, scale up and not only decarbonise our economy but help in overall carbon reduction,” he said.

These companies must focus on reducing carbon emissions by adopting Scope 1 and 2 emissions and make themselves carbon neutral, he added. Scope 1 and 2 categories account for emissions from upstream operations and electricity use, but not the main source of emissions — from the final consumption of the crude and gas produced, which comes under Scope 3 in India’s official nomenclature.

Sustainable policies

“The need for oil and gas will continue in India for at least 20 years. We also need to focus on the steps to be taken for carbon reduction and focusing on sustainable development,” Nath said.

India’s crude import dependency, already at over 80 per cent, has been rising marginally as production from ageing domestic fields declines. “We will have to continue to have energy for the growth and development of the county,” he added.

“We will make our policies as conducive as possible for the investors. Upstream companies have the opportunity to transform themselves and contribute to the growth of the nation as well as sustainability of the climate,” Nath said.

State oil PSU’s Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation have been running a CCUS pilot since 2019 at the latter’s Koyali Refinery in Gujarat.

The Ministry of Petroleum and Natural Gas has recently taken the charge of also promoting hydrogen use in the economy. “A marriage between the natural gas and hydrogen (in transportation) has to happen and we need to work more proactively to scale it further. This is another opportunity for the upstream companies to combine with its development,” Nath added.