Strategy

We follow a location-specific strategy to drive our sustainability journey. Our decarbonisation pathway is shaped by the unique context of each maritime geography in which it operates, within the broader strategic transition framework towards a low carbon ports and logistics ecosystem.

This approach considers:

As a result, our low carbon transition is designed to be adaptive, region-specific, and aligned with both operational realities and stakeholder expectations. This ensures a resilient and future-ready decarbonisation journey across our port network.

Our Decarbonisation Strategy and Transition Framework

At APSEZ, we are committed to achieving Net Zero emissions by 2040. We have accordingly anchored our climate strategy in the adoption and gradual scaling of low carbon technologies, such as green hydrogen, battery storage, large scale renewable energy, and electrification across port operations.

Scope 1 Reduction Strategy

In FY 2025-26, we reinforced our sustainability leadership by investing ₹1,255 crore in key ESG initiatives. These investments targeted electrification, energy efficiency, emissions reduction, water management, and climate adaptation measures. Major interventions included replacing high pressure sodium vapour lamps with energy-efficient LEDs, shifting to battery operated forklifts, expanding access to renewable energy, and progressing on captive renewable energy development.

Scope 2 Reduction Strategy

APSEZ is advancing toward decarbonising purchased electricity by developing 1,000 MW of captive renewable power. Of this, 200 MW of solar, 52 MW of wind, and 25 MW of hybrid capacity have already been commissioned. The full capacity is expected to be commissioned in the near future, enabling a long-term shift toward clean electricity across our port operations.

To reduce direct emissions, the company is transitioning from fossil fuel powered equipment to electric alternatives, and exploring the use of green ammonia for port operations and cargo handling systems. These interventions are core constituents of the company’s Scope 1 decarbonisation roadmap.

Emissions Reduction Strategy

To meet our Net Zero 2040 ambition, we have designed a comprehensive, forward-looking decarbonisation strategy that integrates low carbon technologies across our port and logistics operations. Cargo handling, spanning bulk, breakbulk, containerised, and liquid cargo, relies heavily on diesel-powered equipment. Recognising this, the company is executing a systematic transition toward electric and low carbon systems, guided by a scope-wise emissions reduction roadmap covering Scope 1, Scope 2, and Scope 3 emissions.

Addressing Future Scope 1 Emissions

Internal assessments indicate that most Scope 1 emissions originate from diesel use in cargo handling, dredging, tug operations, and marine activities. Considering the current technology-readiness and infrastructure constraints, we have created a phased transition roadmap that:

• Targets ~75% of projected 2040 Scope 1 emissions through electrification and alternative fuels
• Addresses the remaining 25% through high quality carbon credits, including nature-based and renewable energy based credits

Evolving Carbon Markets and APSEZ’s Strategy

India’s emerging carbon markets – driven by the Carbon Credit Trading Scheme (CCTS) under the Energy Conservation (Amendment) Act, 2022 – provide new avenues for compliance and voluntary offset mechanisms. We are closely tracking these developments, and aim to procure or generate credits aligned with global standards and community co-benefits. For Scope 2 emissions, our 1,000 MW renewable energy development remains central to our clean electricity transition.

Internal Carbon Pricing (ICP)

Internal Carbon Pricing (ICP) is positioned as a strategic enabler of our decarbonisation pathway. It is applied across all major business decisions to:

• Reduce GHG emissions
• Encourage low carbon investments
• Improve energy efficiency
• Guide supplier engagement
• Stress test capital decisions against current and future GHG regulations

We have introduced an internal carbon price of ₹1,880 per tCO₂e (USD 20/tCO₂e) across all Scope 1 and 2 emissions. A cumulative equivalent amount has been set aside for renewable energy investments and energy efficiency programmes. In FY 2025-26, this mechanism generated ₹83 crore (USD 8.8 million), which we have earmarked for decarbonisation initiatives.

Before implementation, all GHG impacting projects undergo a detailed financial and climate assessment. High emissions projects face additional review to ensure adoption of cleaner alternatives. This ensures CAPEX decisions deliver both financial value and long-term environmental benefits.

Objectives of Internal Carbon Pricing

• Navigating current and emerging climate regulations
• Driving energy efficiency
• Catalysing low carbon investment
• Supporting cost benefit and lifecycle analysis
• Reducing upstream value chain emissions
• Guiding strategy and financial planning
• Enabling achievement of climate targets
• Embedding climate considerations into decision-making
• Enhancing climate risk assessment

The internal carbon pricing mechanism helps integrate emissions costs into investment decisions, fostering long-term value creation and sustainable growth.

Climate Investments and Financial Planning

Climate-related risks and opportunities are increasingly shaping our capital allocation, operational strategy, and growth planning. In FY 2025-26, the company invested ₹1,255 crore through internal accruals and debt towards climate initiatives, including:

• Electrification of equipment
• Procurement of low emission cranes
• Rail infrastructure enhancement
• Environmental protection measures
• Energy and water efficiency projects
• Waste management improvements
• Climate resilience enhancements

This included ₹7.65 crore for electric-powered cargo handling equipment, projected to save 120 kilolitres of diesel annually.

Climate considerations are embedded into our Enterprise Risk Management (ERM) and financial planning frameworks, supported by a Board-approved investment roadmap. ₹6,000-8,000 crore has been earmarked for future decarbonisation projects, including renewable energy expansion and green port infrastructure.

Scope 3 Decarbonisation Strategy

We have developed a comprehensive Scope 3 emissions reduction plan, with several initiatives already underway. These include:

• 50% port fee concession for LNG-powered vessels
• Pilot deployment of shore power systems using renewable electricity for ships at berth
• Supplier engagement frameworks to promote low carbon alternatives
• Integration of lifecycle emissions into procurement and capital planning

Using the operational control approach, APSEZ accounts for emissions where it can influence outcomes through procurement, supply chain relationships, and investment decisions. We have identified key Scope 3 categories and corresponding levers, aligning them with our broader decarbonisation goals.