Indian Oil Corporation (IOC) has floated a new subsidiary under low-carbon, clean and green energy business as the nation's biggest oil refining and fuel marketing company pivots a transition plan to achieve net zero emissions from its operations by 2046.

In a stock exchange filing, IOC said its board in its meeting held on March 14 "has accorded approval for the formation of a wholly-owned subsidiary (WoS) in India, subject to the approval of NITI Aayog, DIPAM etc., to operate in the domain of low carbon, new, clean and green energy businesses".

"The proposed WoS will focus and pursue Indian Oil's low carbon and green energy business to meet the operational requirements of the net zero target and beyond," it added.

Also read: All you need to know about Green Hydrogen

IOC Chairman Shrikant Madhav Vaidya had last month told PTI in an interview that the company is remodelling its business with an increased focus on petrochemicals to hedge volatility in the fuel business, while at the same time turning petrol pumps into energy outlets that offer EV charging points and battery swapping options besides conventional fuels as it looks to make itself future-ready.

Also, the company plans to set up green hydrogen plants at all its refineries as part of a ₹2-lakh crore green transition plan to achieve net-zero emissions from its operations by 2046, he had said.

The company intends to expand its refining capacity to 106.7 million tonnes per annum from 81.2 million tonnes as it sees India's oil demand climbing from 5.1 million barrels per day to 7-7.2 million bpd by 2030 and 9 million bpd by 2040.

"Oil will continue to be a mainstay fuel for the next few years, but we are preparing for transition, which will involve a combination of green hydrogen, biofuels, EVs and alternate fuels," he had said.

Hydrogen—the cleanest known fuel that discharges only oxygen and water when burnt—is being touted as the fuel of the future, but its relatively higher cost than alternate fuel currently limits its usage in industries. Refineries, which turn crude oil into fuel, such as petrol and diesel, use hydrogen to lower the sulfur content of diesel fuel.

This hydrogen is currently produced using fossil fuels, such as natural gas. IOC plans to use electricity generated from renewable sources like solar to split water to produce green hydrogen.

Vaidya said the company will set up a 7,000 tonne per annum green hydrogen producing facility at its Panipat oil refinery at a cost of ₹2,000 crore by 2025 and similar units will come up at other refineries as well in due course of time.

The ₹2-lakh-crore investment planned to achieve net-zero covers the cost of setting up green hydrogen facilities at refineries, improving efficiency, renewable energy capacity addition and alternate fuels.

Related Topics