Carbon Capture, Utilisation and Storage (CCUS)

The Union Budget 2026–27 has proposed an outlay of ₹20,000 crore over five years for the development of Carbon Capture, Utilisation and Storage (CCUS) technologies. This allocation aligns with India’s long-term commitment to achieving net-zero emissions by 2070, while acknowledging that industrial growth and energy demand will continue to rise in the near and medium term.

What Are CCUS Technologies?

Carbon Capture, Utilisation and Storage (CCUS) refers to a group of technologies designed to prevent carbon dioxide (CO₂) emissions from entering the atmosphere.

CCUS involves three major stages:

1. Capture

Carbon dioxide released during industrial processes or power generation is separated and captured before it can be emitted into the atmosphere.

2. Utilisation

The captured CO₂ can be converted into useful products, such as chemicals, synthetic fuels, building materials, or carbonated beverages.

3. Storage

Alternatively, CO₂ can be safely stored for long durations in deep geological formations, such as depleted oil and gas fields or saline aquifers.

Thus, CCUS directly addresses emissions from sectors where decarbonisation is difficult.

Why CCUS Matters for Climate Goals

Although CCUS technologies have existed for decades, their global deployment remains limited due to high costs, safety concerns, and scaling challenges.

At present, only about 50 million tonnes of CO₂ are captured annually worldwide, which is less than 0.5% of the nearly 40 billion tonnes emitted each year.

Global net-zero targets are unlikely to be achieved without large-scale deployment of CCUS, especially in hard-to-abate sectors such as steel, cement, and chemicals, where emissions are intrinsic to industrial processes and cannot be eliminated solely by switching to renewable energy.

India’s Growing Focus on CCUS

India’s emissions are expected to increase in the short to medium term due to rapid infrastructure development and industrial expansion. Since announcing its net-zero 2070 pledge at the Glasgow Climate Summit (2021), India has intensified its focus on developing indigenous CCUS technologies.

Key initiatives include:

• Pilot and demonstration projects in steel, cement, and chemical industries;

• Mapping of potential large-scale storage sites across the country;

• Establishment of Centres of Excellence, including those at IIT Bombay and the Jawaharlal Nehru Centre for Advanced Scientific Research;

• Release of a CCUS R&D roadmap for 2030 by the Department of Science and Technology (DST), identifying technological, financial, and policy gaps.

These measures indicate a systematic effort to integrate CCUS into India’s climate strategy.

Why the Budget Allocation Is Crucial

A major obstacle for CCUS deployment has been inadequate funding for field-scale testing and commercial deployment. While many technologies have demonstrated success in laboratories, scaling them up to operational levels involves significant financial risks.

The ₹20,000 crore allocation seeks to:

• Improve technology readiness levels (TRLs) of promising solutions;

• Support systems capable of capturing or storing 100–500 tonnes of CO₂ per day;

• Enable commercial deployment of multiple CCUS technologies within five years.

This financial backing bridges the gap between research and real-world application.

Economic and Industrial Significance

CCUS is particularly important for industries such as steel, cement, power generation, refineries, and chemicals, which are among the largest contributors to India’s emissions.

In sectors like cement and steel, emissions arise not only from fuel combustion but also from core production processes, making complete decarbonisation through renewable electricity alone impossible.

Thus, CCUS offers a practical pathway for reducing emissions while sustaining industrial growth.

Boosting Global Competitiveness

Indian exporters are increasingly exposed to carbon-related trade measures, such as the European Union’s Carbon Border Adjustment Mechanism (CBAM).

By lowering the carbon footprint of Indian products through CCUS, industries can:

• Maintain access to international markets,

• Enhance export competitiveness,

• Avoid carbon tariffs and trade penalties.

Thus, CCUS is not only an environmental strategy but also an economic safeguard.

Looking Ahead

With targeted funding, clearer policy frameworks, and growing industrial interest, India could witness commercial-scale deployment of CCUS technologies within the next five years.

The ₹20,000 crore allocation signals that achieving net-zero will require not only rapid expansion of renewable energy but also direct technological interventions to manage unavoidable carbon emissions.

In the long run, CCUS can contribute to technological leadership, industrial resilience, economic competitiveness, and sustainable development, making it a cornerstone of India’s climate transition strategy.