L&T banks on biodiesel as old construction equipment being removed

Indian construction and engineering conglomerate Larsen & Toubro (L&T) has announced plans to reduce its carbon footprint by phasing out old construction equipment and increasing the use of biodiesel. The company also aims to use electricity from renewable energy sources instead of thermal coal at its manufacturing sites.

Anup Sahay, L&T’s corporate strategy head, stated that the firm plans to retire construction equipment that is more than 15 years old, with specific targets set for different departments. Currently, L&T owns 14,000 pieces of construction equipment, primarily running on diesel fuel, which is also used in generator sets at construction sites. Diesel accounts for 65% of L&T’s emissions, and the company now aims to increase biodiesel use to 30% of its fuel mix.

L&T’s construction business generates 85-90% of the company’s standalone revenue, which exceeded Rs 1,31,000 crore for the financial year 2023-24. Sahay mentioned that L&T operates more than 500 construction sites at any given time.

L&T has established two task forces: one focused on reducing diesel consumption and the other exploring ways to shift electricity use to renewable sources. Sahay noted that L&T’s diesel consumption decreased by 8% in the financial year 2023-24.

L&T has developed five-year plans to reduce carbon emissions, starting from the financial year 2020-2021 and ending in 2025-2026. Sahay cautioned that these efforts to reduce the carbon footprint will take time, estimating it will take many decades to reduce the share of fossil fuels or thermal coal to 25-30%.

For the past few years, the engineering company has been relying heavily on the biofuels’ run equipment including heavy machineries in association with Komatsu India (KIPL).

L&T also secured an EPC contract for the establishment of renewable energy generation, power utilities and water systems for the Amaala tourism project in the Red Sea region of Saudi Arabia.