Larsen & Toubro plans to invest up to $2.5 billion in green energy value chains over the next 3-4 years, a company official said on Sunday.

Engineering stocks are in focus today. Shares in the company were trading at Rs 1,926 at 10.19 am, down 0.4% from the BSE’s previous close.

L&T’s commitment to the green energy plan comes after the company announced plans to be water and carbon-neutral by 2035 and 2040, respectively.

The company plans to make a big push into clean energy, to enter the manufacturing of key technical equipment such as electrolysers, advanced batteries and fuel cells, said Derek M Shah, L&T senior vice president and head of green energy.

He said that the second part of the value chain is engineering, procurement and construction (EPC) projects, adding that the company plans to foray into large-scale EPC projects in the green energy sector.

In April, Indian Oil Corporation (IOC), Larsen & Toubro (L&T) and ReNew Power announced a joint venture (JV) to develop India’s nascent green hydrogen sector to drive decarbonization.

He said companies would create these green assets and enter this link into the entire value chain.

In February, the government announced the first phase of its Green Hydrogen Policy to promote the production of green hydrogen and green ammonia. As oil and gas import bills increase in countries such as India, green hydrogen can help provide critical energy security by reducing overall reliance on imported fossil fuels.

To help decarbonize Indian industry, the new Green Hydrogen Policy provides waivers of interstate transmission fees for 25 years and banking services for up to 30 days, which will help significantly reduce the cost of green hydrogen.

So this will push to replace grey hydrogen with green. The Ministry of Power also provides a single-window approval portal for all priority approvals and open-access green hydrogen projects.