Indian refiner Bharat Petroleum Corp plans to invest $18.16 billion over five years to grow its oil business and expand its renewable energy portfolio as it aims for a 2040 net zero goal, Chairman G Krishnakumar said on Monday.

Companies in India, the world's third largest emitter of greenhouse gases, are investing billions of dollars to cut their emissions, but they are also investing in fossil fuel as India's economic expansion is expected to drive petrochemical and fuel demand.

The nation has set itself a target to reach net zero by 2070. Many Western countries have set a mid-century goal to meet net zero, although political pressure has put some of their decarbonisation plans at risk.

"The company has set a planned capex outlay of around 1.5 trillion rupees ($18.16 billion) in the next five years, which will enable BPCL to create long-term value for our stakeholders while preserving our planet for future generations," Krishnakumar told an annual shareholders meeting.

He did not specify how much would be spent on core oil business versus clean fuel projects.

Krishnakumar, however, said BPCL would invest 1 trillion rupees between now and 2040 for projects including green hydrogen, carbon capture, utilisation, and storage (CCUS) and on improving energy efficiency to cut emissions.

The company hopes to own 1 gigawatt (GW) of renewable energy capacity by 2025 and 10 GW by 2040.

It will invest 10 billion rupees to set up 50 megawatts of captive wind power plants for its 240,000 barrels per day (bpd) Mumbai refinery and Bina refinery in central India.

BPCL is building a 490-billion rupee ethylene cracker at the 156,000 barrels per day (bpd) Bina refinery to raise the share of petrochemicals in its business to 8%. It is also expanding Bina refinery's capacity to 220,000 bpd.

In addition, BPCL is considering adding a Polypropylene project to its 310,000 bpd Kochi refinery in Southern India.

Krishnakumar said the annual fuel deficit in northern India is projected to reach 10 million tonnes this year.

He said BPCL would also invest 375 billion rupees in infrastructure to sell natural gas to households, automobiles and small industries. ($1 = 82.6060 Indian rupees) (Reporting by Nidhi Verma; editing by Barbara Lewis)