Reliance gets world's first 'carbon-neutral' oil from US
The transaction is a first step in the creation of a new market for climate-differentiated crude oil.
Reliance has sourced the world's first consignment of 'carbon-neutral oil' from the United States. The move comes as the company looks to become a net zero-carbon company by 2035.
The US supplier said in a statement that Reliance got 2 million barrels of consignment. The Oxy Low Carbon Ventures (OLCV), which is a division of US oil major Occidental had delivered the carbon-neutral oil to Reliance.
Mukesh Ambani-led Reliance operates the world's largest single-location oil refining complex at Jamnagar in Gujarat with a capacity of 68.2 million tonnes a year.
The transaction is the energy industry's first major petroleum shipment for which greenhouse gas (GHG) emissions associated with the entire crude lifecycle, well head through the combustion of end products, have been offset. It was arranged in conjunction with Macquarie Group's Commodities and Global Markets group (Macquarie).
How will the oil be carbon-neutral?
The Oxy Low Carbon Ventures and Macquarie will offset carbon dioxide equivalent to that associated with the production, delivery and refining of the crude oil and the use of the resulting product through the retirement of carbon offset credits. This will make the oil 'carbon-neutral'.
•A Very Large Crude Carrier (VLCC) Sea Pearl containing the carbon-neutral oil unloaded the cargo at Jamnagar on January 28.
•The Oxy Low Carbon Ventures stated that the oil was produced in the US Permian Basin by Occidental and delivered to Reliance in India.
•Macquarie had arranged and structured the bundled offset supply and retirement.
•The transaction is a first step in the creation of a new market for climate-differentiated crude oil.
•It is also an immediate executable solution that helps promote investments in longer-term, industrial-scale decarbonisation strategies.
•It will also bridge the development of a further differentiated petroleum product, net-zero oil, which will mark a major step towards fulfilling Occidental's net-zero ambitions and commitment to addressing climate change.
•The net-zero oil will be developed through the capture and sequestration of atmospheric CO2 via industrial-scale direct air capture (DAC) facilities and geological sequestration.
Reliance Chairman Mukesh Ambani had in July 2020 unveiled the plans to turn Reliance into a net carbon zero company by 2035. This can be done by adopting new technologies to convert its carbon dioxide emissions into useful products and chemicals.
Occidental, on the other hand, is the first US-based international energy company to announce an ambition to achieve net-zero GHG emissions associated with the use of its products by 2050.
The company has been using carbon-dioxide in its enhanced oil recovery operations in the Permian Basin for over 40 years.