EXCLUSIVE: Target is to reduce absolute emissions by 25% from FY21 baseline by 2030, says Vedanta's Sunil Duggal

Committed to being a net-zero organisation by 2050, Vedanta aims to spend $5 billion in the next 10 years to accelerate the transition to net-zero operations. As the company is putting energy to explore technologies, making long-term business plans, and revamping processes, Sunil Duggal, Group CEO and Chief Safety Officer at Vedanta, in an exclusive conversation with Business Today, talks about the company’s plans for achieving the target.

 

BT: How can corporates contribute to India's mission of Net Zero?

SD: We see Net Zero as a short-mid-and-long-term game. If the Paris [Agreement] goals of limiting global temperatures to 1.5 degrees, or India’s commitments at COP26 has to succeed, the industry has to come to the party and do its part.

Companies such as Vedanta, which produce basic materials, are the foundation of the economy and as such our role becomes critical in helping the world and India meet its commitment to net-zero. Given their access to capital, technology and talent pools; corporates are very well placed to contribute to India’s mission of Net Zero carbon. The focus on renewables will lead to a more mineral-intensive world since electric cars will require six times more minerals than the conventional car, and the onshore wind required nine times more minerals than the gas field plant. Vedanta with its portfolio of future-looking metals will have a pivotal role to play in this.

Large corporations can [also] leverage their influence to decarbonise the whole supply chain. While offsets are expected to remain a part of near-term corporate action, companies should prioritise deep emission cuts before buying offsets. Regulators and consumers can prevent greenwashing by understanding the need for, and the pathways of, net-zero pledges.

The moment we made our Net Zero carbon commitments, we have seen several stakeholders wanting to align with us. We have also seen several other hard-to-abate industries take on similar targets. This collaborative-competitive approach, it what will drive innovation and results.

My experience over the last 2 years of engaging on this topic tells me that when one begins this journey, there are several reasons to turn back. Costs don’t align, technology is not always available, and regulations are evolving. But given the urgency of mitigating climate change, organizations need to get informed and take a calculated leap toward a net-zero carbon future.

 

BT: Why Scope 3 emissions are recommended but not mandatory for Net Zero?

SD: Scope 3 emissions make up a surprisingly high percentage of total emissions for many businesses, often the largest portion of the total. However, Scope 3 is an optional reporting category that allows for the treatment of all other indirect emissions. These emissions are a consequence of the activities of the company, but occur from sources not owned or controlled by the company. As per the new SBTi standard rolled out during COP26, companies are also required to take scope 3 emissions reduction targets if they are aligning their net-zero emissions reduction strategy by 2050.

 

 

BT: Given power and steel, both the sectors, are the biggest CO2 emitters, what kind of work have you undertaken to lowering emissions?

SD: Vedanta has a long-standing zero waste and zero discharge vision. We announced our public commitment to become a Net Zero Carbon organization by 2050 or sooner in October 2021 – pre-ceding India’s COP26 commitment.

We are eager to be future-ready for climate change. And [are] leveraging new technologies to safeguard the environment and communities.

We are among the 24 Indian companies who are signatories to the “Declaration of the Private Sector on Climate Change” and are committed to decarbonizing our operations by 2050. We have partnered with academic institutions to research hydrogen usage in our steelmaking furnaces and if successful, will reduce our dependence on coke usage in our operations which is a significant portion of steel-related GHG emissions.

Power generation is very hard to abate sector since all our power plants are coal-based with no suitable technology to ensure clear generation for our existing assets. We have taken the target of 2.5GW of RE (renewable energy) RTC equivalent power in our operations by 2030. We are also undertaking major energy efficiency improvement projects for our power fleet like revamping turbines to reduce our GHG emissions. We have also taken targets to become water positive by 2030, ensure that we recycle and reuse 100 per cent of our high-volume wastes, and make the organization safe, inclusive and diverse.

Our 10 public commitments for climate change include a commitment for scope 3 emissions disclosures. We will engage with our long-term tier 1 suppliers to ensure that they align their emissions targets with Vedanta’s by 2030. Scope 3 required massive coordination between various stakeholders and we are taking the first step towards it by increasing awareness about ESG and climate change in our business partners.

 

BT: Given the nature of the company, emissions can’t be lowered in a year or two. So, what kind of work have you undertaken to offset the carbon emissions?

SD: If you see our 10 public commitments on climate change, we have identified 4 levers for emissions reduction. The first is to switch to renewables: use of 2.5 GW of RE RTC power in our operations by 2030. The second is to switch to Low-Carbon Fuels: 5 per cent use of Biomass in our coal power plants in near future, 100 per cent LMV fleet electrification by 2030 and 75 per cent mining fleet electrification by 2035. Third is efficiency improvement of our processes. And lastly, we also aim to spend $5 Billion on our energy transition.  We are undertaking pilot projects for Carbon Capture & Utilization (CCUs) and geothermal energy. We are also forming partnerships with leading academic institutions like IIT-B and collaborating with start-ups to innovate solutions to decarbonize our business. Our 2030 target is to reduce our absolute emissions by 25 per cent from the FY2021 baseline.

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