Why Mukesh Ambani wants to make RIL a net carbon-zero company by 2035

After making it a zero net debt company in 2020, Mukesh Ambani has set his sights on turning Reliance Industries Ltd (RIL) into a net carbon-zero company by 2035. India is the world’s third-largest carbon emitter after China and the United States; Ambani is taking the lead in changing that, by making carbon a recyclable resource, rather than treating it as emitted waste. To this end, he has decided to transform RIL from being a conventional oil, gas and petrochemicals firm into a new energy and new materials company.

“We have a 15-year vision to build Reliance as one of the world’s leading new energy and new materials companies. It will be a platform company which will execute our vision in a worldwide collaborative model. Transforming our energy business to tackle one of the biggest challenges before India and the World is our new growth opportunity. On successful implementation of this strategy, we target to become net carbon-zero by 2035,” the RIL chairman said while addressing shareholders at the 43th annual general meeting of the company on Wednesday.

Multi-trillion-dollar opportunity

The idea is to capture a slice of the multi-trillion-dollar opportunity provided by the new energy business, based on the principle of carbon recycling and a circular economy, in which waste is eliminated or minimised while ensuring the continuous use of resources.

Global energy majors such as Saudi Aramco, Exxon, BP and Shell have done significant work in the areas of carbon capture, utilisation and storage for a sustainable energy future.

“Most energy giants are preparing themselves for the post-oil economy with successful diversifications. Mukesh Ambani has crossed the first stage by making data the new oil with the success of Reliance Jio. Now, the focus is to transform the company to a new energy and new materials company by becoming net carbon-zero by 2035. There are multiple ways of capturing carbon but RIL will have the advantage of putting its weight behind such a move on a large scale,” said Utkarsh Sinha, Managing Director, Bexley Advisors, a boutique investment banking firm.

While RIL will remain a user of crude oil and natural gas, the company is working on new technologies to convert carbon into useful products and chemicals. The company has already made substantial progress on photosynthetic biological pathways to convert its carbon emissions at Jamnagar into high-value proteins, nutraceuticals, advanced materials and fuels.

RIL is planning to develop next-gen carbon capture and storage technologies and is evaluating novel catalytic and electrochemical transformations to use carbon as a valuable feedstock.

“We will combine our strengths in digital, power electronics, advanced materials and electrochemistry to build full-stack electrolyser and fuel-cell solutions in India. We will build an optimal mix of reliable, clean and affordable energy with hydrogen, wind, solar, fuel cells and battery,” said Ambani.

The company already has proprietary technology to convert transportation fuels to valuable petrochemical and material-building blocks and is enhancing its capability to replace transportation fuels with clean electricity and hydrogen.

“One critical fact that Mukesh Ambani (outlined) during the AGM is that the company will execute the net carbon-zero (goal) by 2035 through a collaboration model with a coalition of global financial investors, technology partners and start-ups working on futuristic solutions. The world is moving towards clean energy and there is pressure on financial institutions to fund only clean-energy projects,” said Paras Bothra, President, Equities, at Ashika Stock Broking.

Piyush Pandey is a senior journalist based in Mumbai.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Moneycontrol.