India has been strengthening its climate commitments, but faces a difficult path to net zero as it seeks to balance emissions reduction efforts with urgent development needs.
That’s according to analysts at BMI, a Fitch Solutions company, who made the statement in a report sent to Rigzone recently.
“The country’s greenhouse gas emissions have soared, rising more than 175 percent since the turn of the century, making it the world’s third largest emitter,” the analysts said in the report.
“Its domestic economy has expanded at a healthy rate, although the emissions intensity of its GDP has been in decline for much of the past two decades. During this period, its population has expanded by 311 million people, more than double the growth seen in mainland China (137 million),” they added.
“At the same time, the government has pushed to improve access to energy, with the percentage of the population with access to electricity rising from 58.7% in 2000 to 99.6% in 2021, according to the World Bank,” they continued.
Most of the electricity has been supplied by coal, which has contributed 72.7 percent of the total growth in power generation over the past 20 years, IMC analysts noted in the report .
“As a result, per capita emissions have increased,” they added.
“That said, in global terms, per capita emissions remain low. Of the 50 largest economies (collectively accounting for more than 90 percent of global GDP), India ranks 45th in terms of per capita emissions ,” the analysts said in the report.
“When measured in emissions per unit of GDP, it ranks 13th. Over the next decade, India will see the largest increase in its population and the second largest increase in its economy (behind mainland China )”, they continued.
“We can expect a continued reduction in the carbon intensity of their economic output, while population growth should also be less emissions intensive, given that population increases are not compounded (to the same degree) by the increase in access to energy and that renewables are rapidly gaining ground in the energy mix,” they stated.
In the report, the analysts noted that, “due to the sheer size of the market,” India’s domestic policy choices “will play a central role in shaping global emissions trajectories.”
Analysts also noted in the report that India announced plans to reach net zero emissions by 2070 at COP26 and unveiled its Long-Term Low Emission Development Strategy (LT-LEDS ) at COP27, which analysts said outlined some of the steps India would take to achieve this goal.
The role of oil and gas
India’s oil and gas sector can contribute significantly to India’s net zero transition, IMC analysts noted in the report.
“At the national level, the oil and gas sector can play an important role in deepening decarbonisation in the power, industrial and transport sectors,” the analysts said in the report.
“O&G companies can leverage existing expertise, technologies and infrastructure to accelerate the development of a range of low-carbon energies, such as advanced biofuels (including sustainable aviation fuels and marine fuels ) and low-carbon hydrogen and ammonia.” they added.
“In the meantime, fuel distribution networks can be used as an entry point into the electric mobility sector, connecting electric vehicle charging stations with existing service stations,” they continued.
The analysts also stated in the report that the oil and gas sector has strong competitive advantages for CCUS, “as it overlaps with its core competencies in areas such as underground reservoir management and midstream “.
“Overlaps also exist between oil and gas and parts of the low-carbon energy sector, such as offshore wind,” they noted.
IMC analysts highlighted in the report that a growing number of oil and gas companies in the country are committing to net zero goals, “promising substantial investments in low-carbon energy.”
“Among the major players in the upstream and downstream sectors, several have now announced commitments to achieve net zero emissions, including Oil & Natural Gas Corporation (ONGC), Oil India (OIL), Bharat Petroleum (BPCL), Hindustan Petroleum ( HPCL) and Reliance Industries (RIL),” analysts noted.
“The timeframe for achieving net zero, which ranges from 2035 to 2046, is encouraging. However, this only applies to scope 1 and 2 emissions, which is problematic as the most of the GHG emissions (typically more than 70 percent) are accumulated by the end user and therefore fall into scope 3,” they added.
“On the upside, all companies plan to diversify away from their core O&G operations, with renewable energy, green hydrogen and biofuels common targets for investment,” they continued.
Consumption, Production
According to the Statistical Review of World Energy released recently by the Energy Institute (EI), India’s primary energy demand was 36.44 exajoules last year. This marked a growth rate of 5.6 percent year-on-year and six percent of the total share in 2022, the review showed, which highlighted that only China and the United States had primary energy demand figures higher than the country last year.
India consumed 5.288 billion barrels of oil per day, 58.2 billion cubic meters of gas, 20.09 exajoules of coal and 2.15 exajoules of renewable energy in 2022, according to the EI review. Last year, the country’s oil consumption rose 8.2% year-on-year, its gas demand fell 6.3% year-on-year, its coal demand grew 4.1% year-on-year and its demand for renewable energy grew by 18% by 2022, the EI review revealed.
The latest Statistical Review of World Energy showed India’s oil production falling 3.8 percent year-on-year in 2022 to 737,000 barrels per day. In 2022, India’s natural gas production rose 4.4% year-on-year to 29.8 billion cubic meters, its coal production rose 12.1% year-on-year to 910.9 million tons, and its renewable energy generation rose 18.2% to 2.02 exajoules, according to the EI review. .
To contact the author, please send an email andreas.exarcheas@rigzone.com
