Que: Could you describe Dastur Energy’s core mission and how it is contributing to global energy transition goals?

Ans: Dastur Energy's core mission is to create a world of affordable energy abundance and essential materials, consumed with minimal or zero carbon footprint. This vision aligns with the critical global energy transition goals, addressing the growing energy demands over the next 10, 15, or even 30 years, particularly in rapidly expanding economies like India.

To achieve this, Dastur Energy focuses on ensuring energy security and abundance at an affordable cost while prioritising sustainability. The company’s approach emphasises minimising carbon emissions in energy production and industrial sectors such as steel, plastics, and petrochemicals, as well as electricity generation and fuels.

Dastur Energy’s strategy involves designing systems that integrate cutting-edge technology, engineering solutions, policy frameworks, and economic insights. These systems are tailored to enable industries and enterprises to transition towards sustainable practices, with an emphasis on rapid implementation at scale.

While Dastur Energy operates globally, its primary focus is on regions with significant growth potential and energy demands, such as India, the Middle East, and North America. Dastur Energy is also engineering innovative solutions like combining captured CO2 with clean hydrogen to produce methanol so as to transform the fuel, chemicals and polymers value chain. A combination of these three strategies—CCUS, efficiency improvements, and the adoption of alternative technologies—will enable a transformative shift in hard-to-abate industries over the coming decades.

Que: Industries like steel, petrochemicals, and plastics are some of the hardest to decarbonise. What are the most effective carbon management strategies for these sectors, and how is the company supporting these transitions?

Ans: Industries such as steel, petrochemicals, and plastics are notoriously challenging to decarbonise due to their reliance on industrial processes that inherently produce significant carbon dioxide emissions. Dastur Energy leverages its legacy and institutional expertise, built over 70 years of work in sectors like steel, power, cement, and petrochemicals, to address these challenges effectively.

Dastur Energy’s approach is based on a deep understanding of these industries' production characteristics, cost structures, and economic dynamics. This knowledge enables the development of tailored decarbonisation strategies that balance sustainability with affordability. The company emphasises three core strategies for carbon management in hard-to-abate sectors:

Carbon Capture, Utilisation, and Storage (CCUS): CCUS is a critical solution for these industries, as it allows for the capture of carbon dioxide emissions from production processes. The captured CO₂ can either be utilised in smaller-scale applications, such as the production of chemicals or stored permanently underground for sequestration. This approach ensures that industries can continue operating without retiring heavily-invested assets while achieving significant emissions reductions.

Energy and Process Efficiency Improvements: Enhancing energy efficiency and production processes is an ongoing strategy for reducing emissions. Incremental improvements in efficiency can substantially lower carbon footprints while maintaining production levels. Dastur Energy actively works to identify and implement these opportunities across various industries.

Technological Substitution and Alternative Pathways: Developing and adopting alternative production technologies with lower or zero emissions is a long-term strategy. For instance, hydrogen-based steelmaking and electrification of certain processes, such as cracking in petrochemical production, hold promise. However, these technologies are still in the early stages, with challenges related to cost structures, scalability, and access to green hydrogen.

Dastur Energy is also exploring innovative solutions like combining captured CO₂ with hydrogen to produce chemicals such as methanol. A combination of these three strategies—CCUS, efficiency improvements, and the adoption of alternative technologies—will enable a transformative shift in hard-to-abate industries over the coming decades.

Que: Dastur Energy recently collaborated with NITI Aayog on drafting India’s CCUS policy framework. What are the key highlights of this framework?

Ans: India's future economic growth will be significantly driven by industrial expansion, including the development of infrastructure and consumption powered by industries like steel, plastics, fertilisers, and chemicals. Recognising the carbon-intensive nature of these industries, Dastur Energy has collaborated with NITI Aayog to draft a comprehensive Carbon Capture, Utilisation, and Storage (CCUS) policy framework aimed at supporting India’s decarbonisation goals.
This proposed policy framework focuses on several key pillars to enable effective carbon management:

Cost-Effective Carbon Capture, Storage, and Utilisation: The policy emphasises mechanisms to support industries in capturing CO₂ at minimal cost, storing it efficiently, and converting it into value-added products. This includes introducing production incentives—such as providing financial credits or subsidies per ton of CO₂ captured and stored—to encourage adoption across industries.

Viability Gap Funding for Initial Projects: To kickstart commercial-scale CCUS projects, particularly in hard-to-abate sectors like steel and petrochemicals, the framework proposes initial capital support through government funding. This approach aims to bridge the financial gap for early adopters and demonstrate the viability of CCUS technologies.

Innovative Financing Mechanisms: Financing large-scale CCUS projects is a critical challenge. The framework recommends creating a Carbon Capture Finance Corporation, which would pool resources from international green bonds, sovereign bonds, and the existing coal cess (currently INR 400 per ton). This vehicle would ensure budget-neutral operations while funding incentives and projects to drive carbon management.

Market-Driven Carbon Pricing: Over time, the framework envisions the development of robust carbon markets, allowing market forces to determine carbon pricing. This would help establish sustainable incentive structures for CCUS adoption and align with global best practices.

Technology Adoption and Indigenisation: The policy highlights the importance of technology transfer to accelerate the adoption of advanced CCUS solutions. Over time, these technologies can be indigenised, enabling cost-efficient manufacturing and integration into India's industrial ecosystem.

Mapping and Leveraging CO2 Storage Capacity: India has significant potential for CO2 storage, both onshore and offshore, particularly in regions like Gujarat , the Cambay Basin, Krishna Godavari Basin, Haldia offshore and the Deccan peninsula. However, detailed characterisation of these storage sites is essential to identify cost-effective options. The policy proposes developing carbon capture hubs and clusters around these storage locations to enable affordable and reliable CO2 capture, transportation, and sequestration.

Que: It is important to balance renewable energy with other power sources like hydro, gas, and clean coal. What policy or steps can India take to ensure a resilient and integrated energy system?

Ans: India’s energy future depends on creating an integrated energy system that balances renewable energy with other power sources like hydro, gas, coal, nuclear and alternative fuels while maintaining reliability, affordability, and minimal carbon emissions. While renewable energy sources like solar and wind are vital, their intermittent and variable nature requires careful planning and integration.

The following steps and policy measures can ensure an effective energy system:
Balancing Renewable Energy with Dispatchable Sources: Renewable energy alone cannot meet the need for 24/7 power due to its dependency on weather and time of day. To ensure a steady supply of electricity, India must integrate renewables with dispatchable power sources, such as:

a.Gas-based power plants
b.Hydropower and pumped hydro storage
c.Coal-based power plants with carbon capture technologies
d.Emerging technologies like methanol and hydrogen turbines
e.Cost effective small modular nuclear reactors
f.Long duration energy storage through low-carbon hydrogen reservoirs, pumped hydro storage and low cost grid scale batteries.

Strengthening Grid Infrastructure: Developing a robust grid infrastructure is critical to integrating and managing power from diverse sources. Investments in grid expansion, modernisation, and flexibility are essential to support the fluctuating nature of renewables. The grid must be affordable and capable of delivering uninterrupted power to end users.

Implementing Demand-side Management: Encouraging demand-response mechanisms will optimise energy use and reduce peak load stress. A time-of-use-based tariff can incentivise consumers to shift energy usage to off-peak hours. Real-time pricing and trading markets will enable efficient allocation and sourcing of power from various sources.

Developing Power Trading Markets: Wholesale and real-time trading markets should be expanded to ensure optimal utilisation of power resources.

Flexible Power Purchase Agreements (PPAs): Enable cost-effective and efficient use of power from multiple generation sources.

Policy Focus on Reliable and Affordable Clean Power: The primary goal must be to deliver 24/7 clean power that is reliable, affordable, and emits minimal CO₂. Rather than focusing solely on renewable capacity targets, policies should emphasise the overall cost and reliability of power delivered to consumers.

Comprehensive Clean Power Strategy: India’s clean energy future requires a holistic approach that combines, renewable energy generation, integration with dispatchable sources for reliability, investments in grid infrastructure and modernisation, market mechanisms for efficient power trading, and demand-side management for optimised energy use.

To achieve an integrated energy system, India must balance renewable energy with other power sources, supported by robust policies and investments.

Que: How can India effectively build infrastructure that supports both blue and green hydrogen production, transport, and storage, ensuring a seamless shift over time?

Ans: To effectively build infrastructure that supports both blue and green hydrogen production, India needs to adopt a phased and balanced approach, considering both the economic challenges and the technological realities of hydrogen production.

While the vision of transitioning entirely to green hydrogen is appealing, it is currently constrained by significant cost barriers. The cost of producing green hydrogen, which relies on electrolysers and renewable energy, ranges from USD 4 to USD 7 per kilogram. This is significantly higher compared to blue hydrogen, which can be produced from coal gasification with carbon capture, utilisation, and storage (CCUS) at approximately USD 1 to USD 2 per kilogram. Similarly, grey hydrogen produced from natural gas is more economical at around USD 1.20 per kilogram. These cost differences make it clear that a full-scale shift to green hydrogen is not immediately viable.

Given these realities, India must prioritise creating a demand-supply cycle for hydrogen while leveraging its existing resources. The country’s abundant coal reserves present a practical opportunity to scale blue hydrogen production. By using coal gasification with CCUS, India can produce low-cost hydrogen while addressing emissions concerns. This approach allows for the generation of affordable hydrogen to meet industrial needs at large scale and foster demand in sectors such as petrochemicals, steel, fertilisers and heavy transport. Encouraging the use of blue hydrogen in these areas will create a foundation for hydrogen adoption at scale and help kickstart the hydrogen economy.

However, hydrogen production alone is not sufficient. Transportation and storage infrastructure are critical components that need immediate attention. The costs associated with delivering hydrogen from production sites to end users can be significant. To address this, India should invest in pipe-lines and storage systems to facilitate efficient and large scale hydrogen movement through hydrogen corridors that enable industrial clusters. Drawing inspiration from models like the Gulf Coast hydrogen infrastructure in the United States, a government-backed initiative could take the lead in building and managing this network. This would ensure that blue hydrogen can be transported and delivered cost-effectively, supporting large-scale adoption.

In the longer term, as technology evolves, India can work toward reducing the cost of green hydrogen production. This will involve scaling renewable energy capacity, improving electrolyser efficiency, and fostering technological advancements.

Over time, green hydrogen can compete more effectively with blue hydrogen, creating a mixed hydrogen economy that is both clean and affordable.

Ultimately, the focus should not be on choosing between blue or green hydrogen but on creating a clean hydrogen ecosystem that is affordable, scalable, and sustainable.

Que: How do you view the role of platforms like IEW in shaping the future of the energy sector in India?

Ans: Platforms like the India Energy Week (IEW) play a pivotal role in shaping the future of the energy sector in India and influencing its growth on a global scale. One of the most critical aspects of driving energy transitions is creating awareness—awareness about what is achievable, and what the challenges are, and distinguishing between realistic possibilities and the hype surrounding emerging technologies and solutions. IEW serves as a powerful medium to disseminate this knowledge through discussions, debates, and knowledge-sharing sessions. It ensures that accurate information and insights reach a wide audience, enabling informed decision-making.

Another significant contribution of platforms like IEW is fostering collaboration. They provide a unique opportunity for stakeholders from diverse backgrounds—industry experts, policymakers, technologists, and entrepreneurs—to come together, exchange ideas, and build on each other’s expertise. This interaction often leads to the generation of new, implementable ideas and strategies. Whether these ideas translate into actionable projects, policies, or technological innovations, the collaborative environment of events like IEW catalyses progress in the energy sector.

Moreover, IEW serves as an orchestrator for identifying and addressing challenges in energy transition. By bringing together varied expertise, these platforms enable the creation of comprehensive, multifaceted solutions that can be adapted at scale. They also act as bridges between industries and governments, facilitating the translation of discussions into actionable policies or enterprise-level initiatives.

Beyond collaboration and knowledge-sharing, IEW plays a vital role in busting myths and ensuring that stakeholders have a clear understanding of the realities of energy transition. By disseminating facts and promoting transparency, such platforms help build consensus on the way forward, ensuring that efforts are directed where they are most impactful.