HPCL bets big on renewables and biofuels to meet 2040 net-zero target

HPCL's capex spending includes 15% for gas projects, 8% for renewables, 4 per cent for biofuels, 3% for electric vehicle (EV) or alternate fuels and 6% for net zero projects

State-owned oil refiner Hindustan Petroleum Corporation (HPCL) plans to aggressively invest in renewables, biofuels and net-zero projects as part of a larger plan to achieve its net-zero emissions target by 2040.

 

Green energy-related projects would account for around 36 per cent of the company's capital expenditure (capex) amounting to ₹28,000 crore. It is planned for the five-year period ending 2027-28, the company said in an investor presentation. 

 

The company is planning an overall capex of around ₹77,000 crore during the period.

 

HPCL's capex spending includes 15 per cent for gas projects, 8 per cent for renewables, 4 per cent for biofuels, 3 per cent for electric vehicle (EV) or alternative fuels and 6 per cent for net-zero projects.

 

 

The remaining capex will be allocated across segments, with 7 per cent earmarked for non-fuel businesses and 5 per cent for petrochemicals. The bulk 52 per cent would be directed towards its core petroleum operations.

 

The focus on green projects is a major shift in HPCL’s capex strategy as the company spent less than 2 per cent for enhancing biofuels and renewable capacities. And, only around 5 per cent was spent on enhancing the city gas distribution (CGD) network in the previous five years through 2023-24.

 

To meet net-zero targets, HPCL aims to boost its biofuel capacity to 300 thousand metric tonnes (TMT) by 2027-28 from 12.06 TMT in 2024-25.

 

HPCL plans to build 100 kilo litres per day (klpd) of 2G ethanol bio-refinery at Bathinda (Punjab) at a project cost of ₹1,421 core, among several other biofuel projects.

 

The country's third largest-refiner also plans to increase its renewable energy capacity to 2,400 megawatt (Mw) by 2027-28 from 224 Mw at the end of March 2025.

 

A solar power plant at Galiveedu in Andhra Pradesh is under construction at a project cost of ₹682 crore.

 

Under the green hydrogen business, the company plans to drastically raise capacity to 9,670 tonnes per annum (TPA) by 2027-28 from 3.5 TPA in 2024-25. HPCL has commissioned a 370 TPA green hydrogen plant at its Visakh refinery (Andhra).

 

Meanwhile, a 5,000 TPA green hydrogen project at Visakh refinery and 4,300 TPA one at its Rajasthan refinery are in the pipeline.

 

The company is planning to invest an overall ₹60,000 crore towards net-zero plans by 2040.