BPCL weighs legal options as Rs 1-crore environmental fine lingers for over a year

New Delhi: Bharat Petroleum Corporation Limited (BPCL) is facing the possibility of paying a fine of Rs 1 crore as environmental compensation for its failure to install Vapour Recovery System (VRS) at its retail outlets and storage terminals within the timelines prescribed by the Central Pollution Control Board (CPCB). In a regulatory filing made to the stock exchanges on Friday, BPCL said that it will seek legal views in the matter on the next course of action. The matter dates back to 2020 when the CPCB prescribed timelines for the installation of VRS at retail outlets and storage terminals. The pollution board had then mandated oil marketing companies (OMCs) to install VRS at retail outlets by February-August 2022, and at storage terminals by March 2024.

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However, in an order dated November 11, 2024, the CPCB noted that BPCL had not installed VRS at 28 storage terminals within the prescribed timelines and imposed an environmental compensation of Rs 1 crore. Since then, BPCL, along with other state-run and private oil retailers, have even approached the Supreme Court, but to no avail and it now faces the possibility of paying the fine as directed by the body.

Why VRS installation at fuel retail outlets is important?

In a September 2020 directive, the CPCB flagged petrol refuelling stations as major sources of benzene emissions — a known carcinogen — and noted the risk of exposure to people living nearby, as well as fuel station workers. “Petrol refueling stations are also a source of other volatile organic compounds (VOCs), emitted during loading, unloading, and refueling operations. These VOCs contribute to PM2.5 pollution, making their control critical for air quality,” the CPCB noted.

Spelling out the timelines, the CPCB issued directions to BPCL to install VRS in existing petrol pumps selling more than 300 KLPM and located in 46 million plus cities, and, new petrol pumps coming up with a sale potential of 300 KLPM. The order was upheld by the National Green Tribunal (NGT), which said that an environmental compensation be imposed on companies failing to comply with the mandate within the time period prescribed by the CPCB.

BPCL, other OMCs challenge CPCB, NGT order in SC

In 2022, BPCL, along with Indian Oil, HPCL, Shell and Nayara Energy, filed a civil appeal in the Supreme Court (SC) against the said order of CPCB and NGT. The court initially stayed the CPCB order. However, in a later judgment delivered on March 14, 2023, the SC held the OMCs liable for environmental compensation as mandated by the NGT and CPCB.

Even after the Supreme Court ruling, BPCL said in a regulatory filing in November 2024 that it would request CPCB to reconsider the penalty — a position it has now held for more than a year. The company’s latest filing once again states that it is seeking legal views on the matter.

In its latest stock exchange filing, BPCL said the penalty would not have a material impact on its financial or operational activities.

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