Financial Incentives Vital for Energy Transition of Hard-to-Abate Sectors: Interview

Renewable energy enhances competitive advantage in eco-conscious market

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Vedanta Aluminium, part of the Vedanta Group, is among the leading aluminum producers in India. Its smelters and refineries in Odisha and Chhattisgarh are increasing the use of renewable energy sources like solar, wind and biomass for their operations. The company has set a target of reaching net zero by 2050.

In an interview with Mercom India, Sunil Gupta, COO of Vedanta Aluminium, shared details about Vedanta’s sustainable energy practices with the use of renewable energy. He advocates the introduction of targeted financial incentives to encourage hard-to-abate sectors to transition to cleaner sources of energy.

Vedanta Aluminium aims to increase renewable energy usage to 30% by 2030. Can you elaborate on the steps to achieve this target and the renewable energy mix you plan to adopt?

Vedanta Aluminium is committed to achieving 30% renewable energy usage by 2030 as part of its net zero emissions goal by 2050. To achieve this, we have partnered with Serentica Renewables to procure 1.3 GW of solar and wind energy for our operations in Odisha and Chhattisgarh. Additionally, we are deploying biomass briquettes, made from agricultural residue sourced from local farmers, as a cleaner alternative for power generation, fostering circular economy practices and reducing annual CO2 emissions by over 16 tons. At our Jharsuguda smelter, we are in the process of deploying natural gas for powering casthouse operations at Jharsuguda through a collaboration with GAIL Gas, which is expected to reduce CO2 emissions by approximately 47,292 tons annually. These initiatives are integral to diversifying our energy mix with cleaner sources and reducing our carbon footprint. By strategically leveraging solar, wind, and biomass energy, we are paving the way for a sustainable, low-carbon future.

What is Vedanta Aluminium’s total energy consumption across operations, and what percentage is currently met by renewables?

Renewable energy comprises nearly 5% of our total energy consumption, and we have set ourselves a target of reaching 30% by 2030 alongside the expansion of our production capacity. We expect to increase our aluminum production capacity to 3 million metric tons by 2026, up from about 2.4 million tons currently.

What are the expected benefits of increasing renewable energy utilization for Vedanta Aluminium’s growth and operations?

Increasing renewable energy utilization supports our net zero goals while also reducing dependence on fossil fuels and lowering our carbon footprint. This transition enables the growth of our low-carbon aluminum portfolio, catering to environmentally conscious customers and the renewable energy sector.

By aligning with global sustainability goals, renewable energy use enhances our competitive edge in an eco-conscious market while driving robust growth. Additionally, it strengthens our reputation as a responsible corporate citizen, contributing to climate action and positioning us as a preferred partner in the global transition to sustainable practices.

How does Vedanta Aluminium plan to balance India’s energy policies on renewables and coal? What is the Vedanta Group’s stance on coal-based thermal power?

Vedanta Aluminium fully aligns with India’s vision of achieving net zero emissions by 2070, prioritizing renewable energy while recognizing coal’s role in supporting economic growth. We have stopped expanding coal-based thermal capacity, focusing instead on integrating solar, wind, and biomass energy into our operations. India’s ambitious target of 500 GW non-fossil fuel capacity by 2030 inspires us to innovate and contribute meaningfully.

Vedanta Aluminium aims to achieve Net Sero emissions by 2050. What challenges do you foresee in reaching this ambitious goal?

India’s rapid industrialization and urbanization, coupled with increasing infrastructure development and evolving consumer habits, present a significant demand for aluminum—a versatile and sustainable material. This transition allows us to innovate and optimize our operations, adopt cleaner technologies, and expand our portfolio of low-carbon aluminum, such as the Restora brand, catering to eco-conscious industries.

Our journey towards Net Zero comprises a two-fold strategy of reduction and offsetting to reduce our environmental impact and create a safer future. Through reduction, we focus on optimizing our operations to minimize energy consumption, reduce emissions, and adopt cleaner technologies. Simultaneously, our offsetting initiatives help balance the remaining emissions by investing in projects that actively remove or reduce carbon from the atmosphere, such as afforestation, biodiversity conservation efforts and renewable energy ventures.

This year, Vedanta Aluminium began using biomass briquettes for energy generation. How does this impact the company’s reliance on other renewable sources like wind and solar?

At Vedanta Aluminium, we are currently utilizing biomass briquettes as an alternative fuel. For example, at our world-class alumina refinery in Lanjigarh, Odisha, we use 20 tons of briquettes per day, which will reduce greenhouse gas emissions by over 10,000 tons[1] of CO2 equivalent annually. These briquettes are produced from agricultural residues, which local farmers would otherwise burn.

By compensating farmers for their crop stubble, we are making efforts to promote a circular economy while also enhancing rural incomes, thereby supporting local communities and addressing climate change concerns.

As India moves to integrate cleaner and more sustainable energy systems, strategically deploying biomass co-firing within our operations can help us achieve emission reduction targets while also benefiting rural economies. By design, we are diversifying our energy portfolio by adding non-fossil energy sources. It is an important component of our plan to explore developing solutions for decarbonizing our operations.

What policy measures should the government implement to accelerate renewable energy adoption, particularly in energy-intensive and hard-to-abate sectors?

To accelerate renewable energy adoption, particularly in energy-intensive and hard-to-abate sectors, the government should introduce targeted financial incentives to encourage the shift to cleaner technologies. Stronger public-private partnerships are essential to streamline regulations, enhance implementation efficiency, and foster innovation.

Additionally, setting clear, sector-specific renewable energy mandates and creating markets for carbon trading can drive accountability. These measures, coupled with a focus on simplifying policies and infrastructure support, will enable a faster transition to sustainable energy solutions across industries.

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