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India’s O&G Sector Walking Tightrope to Net Zero

Oil and gas firms in India face a challenging road to net zero, as they balance decarbonisation commitments with the expected growing domestic need for fossil fuels, according to new research by BMI, a unit of Fitch Solutions. As India’s population has expanded, dependence on carbon-intensive resources has increased, the report noted, with 72.7% of electricity demand met through coal as of 2021. A growing number of oil and gas firms have also been making net zero commitments across their Scope 1-2 emissions, including the Oil and Natural Gas Corporation and Bharat Petroleum. While these companies plan to diversify outside their core oil and gas operations, by investing in renewable power, green hydrogen and biofuels, the report said no Indian oil and gas firm has yet to publish a credible pathway to net zero or concrete interim targets. Further, over a ten-year horizon, oil and gas consumption is expected to see “a robust level of growth”, with natural gas-fired generated expected to increase by over 85% by 2032. “Over a multi-decade horizon, as low-carbon energy supplies and supporting infrastructure are built out, oil and gas demand destruction will deepen,” BMI said. “But in the interim, Indian O&G companies face an uphill struggle in adequately serving their domestic energy markets, whilst getting on track to a net zero pathway.”

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