Making The Oil And Gas And Ancillary Industries More Environmentally Friendly

The EU Commission declared its plans to levy the world’s first carbon-border-tax on imported goods like carbon-intensive steel starting from 2026. This is in line with the 27-nation bloc’s carbon targets that they believe can in part be achieved by penalising exports from outside member states and their means of production. In essence, this tax would impel non-EU companies exporting to Europe to pay the same price for their carbon footprint in Europe as European companies. This would have an impact on India that has led it to urge G20 members with per capita greenhouse gas (GHG) emissions above the global average to bring it down to the world average, to vacate carbon space for developing nations. Not just India but all BASIC (Brazil, South Africa, India and China) countries' have opposed the EU's proposal. 

By increasing the prices of Indian-made goods in the EU, this tax would make Indian goods less attractive for buyers and could shrink demand. According to an analysis by management consultancy BCG, the tax "would create serious near-term challenges for companies with a large greenhouse gas footprint--and a new source of disruption to a global trading system already roiled by tariff wars, renegotiated treaties, and rising protectionism.”

Ground reality

The reality on the ground is that many small businesses will face difficulty in quantifying their emissions. Moreover, while oil companies should rightly play their part, products made by MSME companies such as ours are far from being big polluters. Such a tax would not only discourage companies within the oil and gas and even other sectors that are already adopting cleaner technologies but also eventually reduce their competitiveness as the additional costs will be passed on to the consumers. Additional compliance and process hassles would prove to be determinantal to our operations. At Gandhar Oil for instance, we work on ensuring the engines of industry function at their optimum. Be it power transmission, automotive industry (ICE or Electric), manufacturing of medicines, or FMGC products. Small steps help achieve desired outcomes! We have begun implementing solar power generation solutions, reducing and where possible eliminating the use of plastics and other packaging and instead deploying eco-friendly packaging.

Suggestions for small to mid sized petrochemical and oil blending companies to become more sustainable:

1) Encourage use of sustainable products

Printer paper, cleaning products, containers, etc. are harmful to the environment due to the toxic chemicals that go into making them. Using recycled products can reduce waste and promote greener products that don’t include toxic chemicals but natural ingredients that work just as well.

2) Reduce, reuse, recycle

Companies should endeavor to reduce usage where they can. Instead of disposable cups and plates, they can opt for glass, steel or ceramic alternatives. In the office, employees should be encouraged to use both sides of the printer paper. Companies can also make the recycling process less complicated by providing bins designated by waste type.

 3) Open up to the prospects offered by renewable energy: Solar is leading the renewable energy industry with an impressive growth rate that is only expected to soar in the decades to come. Companies with a long term vision are making substantial investments in renewable energy and implementing these solutions.

4) Leverage innovative software to help reduce carbon footprint: Innovative software and technology can be used to make the processes greener, without reducing production rates. This aids in the environmental cause and builds sustainability while also achieving cost-efficient processes across the company. For instance, websites use energy. The servers that host a website’s data are constantly on, using up copious amounts of energy. Luckily, companies can choose where their data is stored. More and more, eco-conscious companies are offsetting that energy usage to go carbon neutral.

5) Reducing travel: Reducing business travel doesn’t only benefit the environment, but it also benefits the company. Companies can cut down on costs significantly and reduce Co2 emissions. There are quite a few companies including major multinationals as well as small businesses that are turning to alternative modes instead of flying.

At the end of the day, all companies in this sector, irrespective of their size can do their part in reducing emissions and contribute in our collective journey towards a healthier planet.