Refinery sector must balance energy security with net-zero push: industry experts at The Hindu Sustainability Summit

India's refining and energy sector will have to balance growing energy demand and energy security with the transition towards net-zero emissions, industry leaders said at a panel discussion at the The Hindu Sustainability Summit 2026 in Chennai.At a discussion on the topic of ‘Fossils to Net Zero: Transforming India’s Refinery and Energy Landscape’, S.G. Venkatesh, Director (Technical), Chennai Petroleum Corporation Limited (CPCL); Nandakumar Velayudhan Pillai, Director (Refinery), Mangalore Refinery & Petrochemicals Limited (MRPL); Santosh K. Singh, Chief Sustainability Officer, Larsen & Toubro; and D. Senthil Kumar, Managing Director, Tamil Nadu Petroproducts Limited, spoke about the challenges facing the sector. The session was moderated by Srinivasan Ramani, Deputy National Editor, The Hindu.Mr. Venkatesh said achieving net zero for a refinery involved reducing the energy required to produce the same quantity of finished products and progressively shifting to cleaner energy sources and technologies.He said the CPCL had reduced its energy consumption even as it achieved its highest-ever crude throughput through energy conservation measures, use of cleaner fuels, operational optimisation, and digitalisation. The company had also improved its energy efficiency benchmark and was targeting net-zero Scope 1 and Scope 2 emissions by 2046.While Scope 1 covers direct emissions from refinery operations and Scope 2 covers emissions associated with purchased electricity, reducing Scope 3 emissions would depend on the wider transition in sectors that consume refinery products, particularly transport, he said.No immediate replacement of fossil fuels“Fossil fuels are not going to go away, at least for the next two decades,” Mr. Singh said, adding that the transition should be viewed as a shift from a high-carbon energy system to a low-carbon one rather than an immediate replacement of fossil fuels.Mr. Singh said green hydrogen had already moved from the policy stage to implementation, but cost remained a major barrier. Scaling up electrolyser manufacturing, reducing renewable energy costs and creating demand would be crucial to making the fuel commercially viable.The transition to a green hydrogen economy would also require an ecosystem covering renewable power generation, energy storage, electrolysers, hydrogen storage, transportation and end-use, he said.Mr. Pillai said the intermittent nature of renewable energy posed a particular challenge for refineries, which require a continuous and stable energy supply. “The refinery process cannot have a variation in its feed flow,” he said, pointing to the need for energy storage and technological improvements in electrolysers.The panellists also discussed how geopolitical conflicts and disruptions to key shipping routes could affect crude supplies and refining operations, particularly for an import-dependent country such as India. They said such shocks underscored the need for refineries to diversify crude sources and strengthen supply resilience while ensuring uninterrupted energy availability.On sustainable aviation fuel (SAF), Mr. Pillai said refineries had begun developing projects using used cooking oil as a feedstock. The major challenge was collecting adequate quantities of used cooking oil and meeting sustainability certification requirements. A SAF plant using indigenous technology was expected to be commissioned next year, he said.Carbon Credit Trading SchemeMr. Kumar said the Carbon Credit Trading Scheme would shift energy efficiency from a largely voluntary exercise towards a compliance-driven mechanism for refineries and petrochemical industries. Under the scheme, industries would have prescribed emissions-intensity targets for a specified period, against a baseline determined using identified operating parameters. Companies that improve beyond their targets could trade the additional efficiency achieved through certificates, while those unable to meet their targets would have to procure certificates to bridge the shortfall.He said similar mechanisms were already in place in other industries under the Bureau of Energy Efficiency, including through the Perform, Achieve and Trade scheme. However, the earlier mechanism had not gained sufficient traction. With the carbon market now being expanded to more industries, including refineries and petrochemicals, trading activity could increase significantly, he said. “The trading activities are expected to be very challenging in the future,” he said, adding that the incentives available to industries that perform better than their targets could create greater scope for investment in energy efficiency.The panellists also stressed that energy efficiency should precede more expensive decarbonisation technologies. The discussion highlighted the need for a gradual transition that safeguards energy security while accelerating investments in efficiency, renewable energy, green hydrogen and sustainable fuels.