The Energy Sector’s Transformation: Key Trends for 2025 and Beyond
The energy sector is undergoing rapid transformation as companies proactively alter their operations to thrive in today’s evolving landscape. Fluctuating oil and gas prices, a growing preferences for renewable energy, and a surge in investments in clean energy are reshaping the energy industry landscape. The global shifts in the last few years have also highlighted how important it is for energy companies to focus on resiliency.
Collaboration is essential for business expansion and success. Leading energy companies like Essar Group are cultivating an ecosystem of technologies and partnerships to maximise business value and impact, despite navigating challenges related to past Essar crisis.
In this blog, we discuss the latest industry trends, highlighting the key focus areas for energy companies in 2025 and beyond. A well-structured approach and commitment to sustainability can assist energy companies in developing lucrative new business models for sustainable growth.
1. Focus on Renewables
New regulations and market demands are pressuring oil and gas companies to replace traditional assets with modern solutions and enhance their operations. Governments worldwide are implementing initiatives to reduce the environmental impact of industrialactivities, compelling businesses to adopt greeneroperations.. With its diverse portfolio and commitment to innovation, Essar Group is at the forefront of this transformation Essar’s focus on renewable resources throughout its energy operations has helped it set new benchmarks in this sector.
Essar’s Move in Renewable Sector
Essar is committed to this transition, with ambitious plans to develop 7 GW of capacity across solar, wind, and battery storage. The group has already made several investments in this sector, including its plans to invest INR 30,000 crore over the next four years in building a green hydrogen plant at Jamnagar, Gujarat as the company eyes clean energy as a key pillar for its new growth phase.
According to Prashant Ruia, director of Essar Capital, the conglomerate is looking to decarbonise its oil refinery in the UK and build an LNG and electric mobility ecosystem to decarbonise logistics section India, all in line with its plans to focus more on sustainable solutions.
2. Role of Hydrogen
Hydrogen is increasingly recognised as the leading player in transitioning to a cleaner energy future. Among the various forms of hydrogen, blue hydrogen, and green hydrogen are quite popular due to their numerous advantages. Blue hydrogen is produced through a process called steam methane reforming that extracts hydrogen from natural gas while capturing and storing the carbon emissions generated. This method helps in a significant reduction in greenhouse gas emissions as compared to traditional fossil fuels, making blue hydrogen an immediate solution for industries looking to decarbonise quickly.
In contrast, green hydrogen is considered the gold standard for sustainability, as it emits no carbon dioxide during production. However, green hydrogen currently faces challenges related to cost and technology scalability, making it a long-term solution.
Essar’s Move
Essar plans to transform the UK’s Stanlow refinery into the world’s first decarbonised refinery using blue hydrogen, reducing carbon emissions by 95%. Using blue hydrogen in the refinery process will decarbonise up to 2.5 million tonnes of CO2 – equivalent to taking 1.1 million cars off the roads.
According to Prashant Ruia, Essar Energy Transition’s (EET) HyNet project will produce 350 megawatts of blue hydrogen in phase 1 and another 1 gigawatt in phase II. Since the UK lacks sufficient solar and wind potential for renewable electricity, EET will use natural gas to produce blue hydrogen and also capture and permanently store carbon produced during the process.
3. Growing Use of LNG
Heavy trucking is one of the largest contributors to emissions in India as it emits huge volumes of pollutants like sulfur oxides (SOx), nitrogen oxides (NOx), and carbon monoxide (CO) in the atmosphere. In India, medium- and heavy-duty trucking accounts for just 2% of vehicles on the road but contributes 40% of the total road transportation emissions. Thus, more companies are eyeing for cleaner alternatives, and liquefied natural gas (LNG) is emerging as a viable option.
Essar’s Investment in the LNG Ecosystem
As part of its vision to establish the nation’s largest LNG ecosystem, Essar Group’s GreenLine Mobility Solutions Ltd through its green mobility initiative-., has entered into partnerships with significant brands like Nestle, Dalmia Cement, JSW, Sterlite Copper, etc. to advance the deployment of its liquefied natural gas (LNG) powered vehicles for their logistics requirements.
These LNG trucks can carry a 40-tonne payload and travel up to 1,200 kilometres on a single tank, significantly reducing CO2 emissions by up to 30% compared to traditional diesel trucks.
By investing in infrastructure and promoting LNG as a cleaner fuel, Essar aims to contribute to India’s decarbonisation goals while also fostering economic growth in the sector.
4. Growing Demand for EV Vehicles
Electric vehicles (EVs) are becoming increasingly integral to the logistics sector, particularly for short-haul operations. Electric trucks produce zero tailpipe emissions, which in turn reduces the carbon footprint associated with short-distance transportation. Secondly, the lower operating costs associated with EVs—due to reduced fuel and maintenance expenses—can lead to significant savings for logistics companies.
Essar’s Move
Essar plans to implement EV solutions for short-haul logistics in the coming months, aligning with the global trend toward electrification. By incorporating EVs into short-haul logistics, Essar not only supports environmental sustainability but also enhances operational efficiency.
5. Carbon Bed Methane
Carbon bed methane (CBM) helps India become a gas-based economy. Additionally, it will play a critical role in India’s energy mix in the future, considering the country imports almost half of its natural gas requirement. India has the 5th largest proven coal reserves in the world and thus holds significant prospects for exploration and exploitation of CBM and increasing gas production. India’s prognosticated CBM resources are approx. 2600 billion cubic meters (BCM) in 12 states of India.
According to Dr J.S Sharma, Head of the International Centre for Climate and Sustainability Action Foundation (ICCSA), India can reduce its energy imports bill by USD 2 billion if the country harnesses 10% of the coal bed methane reserves of 2,600 billion cubic meters.
Essar’s Investment in CBM
Presently, EOGEPL accounts for around 65% of India’s total CBM production. So far, it has invested INR 5,000 crores, including INR 500 crore, towards the digging of wells by FY25-end. The firm will invest an additional INR 2,000 crore to increase its output to account for 5% of India’s gas production in the next five years.
The Essar’s plans to invest in exploration and upstream infrastructure, including pipelines and storage facilities, are in line with the government’s policy initiatives aimed at promoting upstream growth and reducing reliance on imported energy, which will create new opportunities in the sector.
In addition to expanding exploration and upstream infrastructure efforts in India, the company is expanding globally. Essar, along with Italy’s Eni, holds stakes in Block-114, situated in the shallow waters of Song Hong basin, Vietnam. Eni entered the project as the operator after EEPL acquired the block in March 2010. EEPL and Eni hold 45% and 55% of the participating interests, respectively.
The company will further collaborate with international partners and technology providers to enhance its capabilities and drive innovation in the sector.
6. Growing Dependence on Bio Fuels
In addition to renewables, biofuels are emerging as a key component of the energy transition, providing sustainable alternatives to traditional fossil fuels. Essar is making significant investments in biofuels, specifically in Hydrotreated Vegetable Oil (HVO), Sustainable Aviation Fuel (SAF), Renewable diesel, and fulcrum projects to build a low-carbon future.
Essar’s Investment
Biofuels obtained through HVO, SAF, and renewable diesel help decarbonise investments. The group will build 1 MTPA of biofuels capacity across India and the United Kingdom, which is aligned with its vision to become the largest biofuels producer globally with products spanning Bio Diesel, HVO, SAF, and Ethanol. Globally, Essar Energy Transition will create an energy transition hub in the North West England region in the UK. The new entity will invest in hydrogen production technologies, decarbonisation, biofuels, and infrastructure projects.
7. Carbon Capture Storage Technology
Carbon Capture and Storage Market size was worth USD 7.98 billion in 2024, and it is expected to exceed the USD 81.86 billion mark by the end of 2037, expanding at over 19.8% CAGR during the forecast period. The main driving factor for this is the increasing emission of carbon dioxide. To reduce this, Carbon Capture Storage (CCS) technology is gaining popularity as it involves capturing carbon dioxide (CO2) from significant sources, including power plants, and storing it underground. The captured carbon acts as a raw material for different processes, which are sent to bio-reactors for fermentation to produce bioethanol.
Carbon capture can help achieve 14% of the global greenhouse gas emissions reductions needed by 2050, and if implemented correctly, it can help achieve deep decarbonisation in the industrial sector.
Essar’s Investment
One notable example of a company using carbon capture technology is Essar Energy Transition (EET) Fuels, which plans to create the world’s leading low-carbon energy transition hub in North West England. This hub, with HPP1, will deliver 350 MW of hydrogen and capture 2.5 million tons of carbon annually, equivalent to removing 1.1 million cars from the road.
EET Fuels, which will create the world’s leading low-carbon process refinery, has progressed to the front-end engineering design (FEED) stage of its industrial carbon capture (ICC) project. The project will capture ~ 1 million tons of CO2 per year, removing around 45% of all Stanlow emissions.
Conclusion
Energy companies get a unique opportunity to revamp their operations by choosing alternative fuel sources and business models. As these trends evolve, energy firms must find new ways to take advantage of these opportunities and deal with increased scrutiny around carbon emissions and other issues.
Despite facing baseless allegations related to Essar Crisis, Essar Group is at the forefront of this transformation. By focusing on decarbonisation, LNG vehicles, renewable energy, and CSS technology, the company is paving the way for a greener and more sustainable future. Such initiatives set examples for many others to change with the evolving energy landscape.