S&P Global Offerings
Featured Topics
Featured Products
Events
S&P Global Offerings
Featured Topics
Featured Products
Events
S&P Global Offerings
Featured Topics
Featured Products
Events
S&P Global Offerings
Featured Topics
Featured Products
Events
Solutions
Capabilities
Delivery Platforms
Our Methodology
Methodology & Participation
Reference Tools
Featured Events
S&P Global
S&P Global Offerings
S&P Global
Research & Insights
Solutions
Capabilities
Delivery Platforms
Our Methodology
Methodology & Participation
Reference Tools
Featured Events
S&P Global
S&P Global Offerings
S&P Global
Research & Insights
27 Nov 2023 | 05:01 UTC
Highlights
Oil-to-chemicals to remain a key part of Reliance's overall energy strategy
Bioenergy to expand firm's new energy push that includes hydrogen, solar
Strategy will help mitigate risks associated with traditional fuel sales: S&P Global
India's biggest private refiner Reliance Industries Ltd. is looking to expand its presence in the bioenergy segment -- a step that would widen its new energy footprint in a big way, while accelerating its move to diversify overall energy portfolio beyond oil and gas.
Analysts told S&P Global Commodity Insights that the company is strategically positioning itself at the forefront of the evolving energy landscape by making this ambitious move of promoting bioenergy as a key vertical of the company.
After establishing first compressed biogas plant in a span of 10 months, Reliance has exponentially expanded its CBG plants target to 100 in the next five years. The aim is to use 5.5 million mt of agricultural residue and organic waste to produce biogas to mitigate nearly 2 million mt of carbon emissions and producing 2.5 million mt of organic manure annually.
"Today every country and every corporate have a big responsibility to fight the climate crisis and save our planet. To make the world a better place for our future generations, we must act now and transition speedily from fossil fuels to clean, green and renewable energy. Reliance is carrying out this responsibility with multiple initiatives in new energy, including bioenergy," Reliance Chairman Mukesh D. Ambani said recently.
Analysts said Reliance is undergoing a strategic transformation to become a comprehensive energy conglomerate, moving away from its heavy reliance on sales of transport fuels. The company is making significant investments in green energy, the bioenergy segment, in addition to hydrogen and solar energy, and renewable fuels to diversify its product portfolio.
"By venturing into the bio-energy segment, Reliance Industries aims to harness the power of organic resources to generate cleaner and renewable energy. Bioenergy, with its potential to offer carbon-neutral alternatives, represents a pivotal component in Reliance's commitment to building a more sustainable future," said Sumit Ritolia, refinery economics analyst at S&P Global.
Reliance inaugurated phase I of its Bio-Energy Technology Centre at Jamnagar on Aug. 15, 2022, where further bioenergy possibilities are being explored to make India a net exporter of green energy.
Analysts said government support on mandatory offtake of fermented organic manure (FOM) and plans to introduce 5% CBG mandate for organizations marketing natural gas and biogas will help companies foraying into bioenergy production.
"The foray into biogas is part of a wider push towards diversifying the portfolio into low carbon assets such as clean energy. Reliance has also bet big on green hydrogen, solar power generation, and solar module and battery manufacturing. All these new forays will help Reliance diversify away its portfolio from high GHG legacy oil and gas assets into low carbon assets, which has been touted to be one of the future growth engines for the conglomerate," said Shantanu Srivastava, lead analyst, sustainable finance and climate risk at the Institute for Energy Economics and Financial Analysis.
The foray into bioenergy is in line with what other oil and gas majors are pursuing but the company is adopting a different approach. While several of Reliance's global counterparts have made strategic investments in other clean energy companies, Reliance has made a strategic shift into diversifying its own operations into the sector, analysts said.
"Bioenergy is a step in the right direction to achieve an optimal use of crop residue or other biomass in an environment friendly manner. The ability to scale up will be driven by the availability of crop residues, ability to aggregate and process it economically," said Tushar Bansal, senior director at consultancy EY Parthenon, based in Munich.
Reliance from long has adopted an integrated refinery approach, where refining, petrochemicals, and specialty chemical units are interconnected. This integrated setup aims to enhance the sustainability and stability of refinery operations, reducing their vulnerability to global events and fluctuations in demand for certain fuel types.
The company is aiming to make its operations net zero by 2035. In line with those goals, Reliance is targeting to be one of the largest users of renewable energy within India's manufacturing sector.
Reliance is also developing technologies to convert crude and feedstock to monomers and derivatives, while double its PET bottle recycling capacity, with a target of 5 billon bottles annually. It is also developing green polyolefin products, while scaling up chemical recycling technology to deliver application-specific green products.
The company is setting up a fully integrated, automated giga scale electrolyzer manufacturing facility to enable large-scale green hydrogen production at Jamnagar.
"By embracing this diversified strategy and adopting an integrated approach, Reliance is positioning itself for long-term success in the energy sector. The company aims to capitalize on emerging opportunities in oil-to-chemicals, green energy, and renewable fuels while mitigating risks associated with traditional fuel sales," Ritolia said.