What Happened
- The Union Budget 2026-27 allocated Rs 20,000 crore over five years for a dedicated Carbon Capture, Utilisation and Storage (CCUS) scheme targeting industrial decarbonisation.
- The scheme focuses on five high-emitting sectors: power, steel, cement, refineries, and chemicals — collectively responsible for a large share of India's industrial CO2 emissions.
- The initiative moves CCUS from pilot-stage research toward policy-backed industrial deployment, aligned with India's commitment to achieve net-zero emissions by 2070.
- Key geological basins — Krishna-Godavari, Rajasthan, and Tamil Nadu's sedimentary zones — have been identified as potential CO2 storage sites.
Static Topic Bridges
What is CCUS and How Does It Work?
CCUS (Carbon Capture, Utilisation and Storage) is a suite of technologies that intercept CO2 at the point of emission before it enters the atmosphere, then either permanently store it underground or convert it into useful products. The process has three stages: (1) Capture — CO2 is separated from industrial flue gases using chemical solvents, membranes, or solid sorbents; this can happen before combustion (pre-combustion), after combustion (post-combustion), or through oxy-fuel combustion. (2) Compression and Transport — captured CO2 is compressed into a supercritical state and transported via pipelines or tankers. (3) Utilisation or Storage — CO2 is injected into deep geological formations (saline aquifers, depleted oil/gas reservoirs) for permanent storage, or converted into fuels (methane, methanol), building materials, food-grade CO2, or chemicals.
- India's geological CO2 storage potential is estimated at 500–1,000 gigatons (GT), making underground storage technically feasible.
- The Department of Science and Technology (DST) has established two National Centres of Excellence in Carbon Capture and Utilisation — one at IIT Bombay.
- The NITI Aayog published a CCUS Policy Framework report in 2022 outlining India's phased CCUS deployment roadmap.
- Technology roadmap: foundational R&D and pilots (2025–30) → industrial integration and regulation (2030–35) → commercial scale-up (2035–45).
Connection to this news: The Rs 20,000 crore allocation operationalises this roadmap by providing financial support for CCUS deployment across the five hardest-to-abate industrial sectors in India.
India's Climate Commitments and the Hard-to-Abate Problem
India submitted its updated Nationally Determined Contributions (NDCs) under the Paris Agreement (2015), committing to reduce the emissions intensity of GDP by 45% from 2005 levels by 2030, achieve 50% cumulative electric power from non-fossil sources by 2030, and reach net-zero by 2070. However, certain industrial sectors — steel, cement, and chemicals — cannot easily electrify or switch fuels because CO2 is an inherent byproduct of the chemical processes (e.g., calcination of limestone in cement production). These are called "hard-to-abate" sectors, and CCUS is one of the few viable decarbonisation pathways for them.
- India is the world's third-largest CO2 emitter, with industry accounting for roughly 25–30% of total emissions.
- India's cement industry is the second-largest in the world; the steel sector is the second-largest domestically and a major exporter.
- The Paris Agreement (2015) requires signatories to limit global temperature rise to well below 2°C above pre-industrial levels, with efforts to limit it to 1.5°C.
- CCUS is recognised by the Intergovernmental Panel on Climate Change (IPCC) as a critical mitigation tool in scenarios that limit warming to 1.5°C.
Connection to this news: The Budget allocation directly addresses the decarbonisation gap that renewable energy alone cannot fill — providing a technology pathway for industries where emissions reductions through electrification are not feasible.
India's Industrial Decarbonisation and Energy Policy Architecture
India's approach to industrial decarbonisation operates through multiple policy instruments. The Perform, Achieve and Trade (PAT) scheme under the Bureau of Energy Efficiency (BEE) sets energy intensity targets for energy-intensive industries and allows trading of energy saving certificates. The National Action Plan on Climate Change (NAPCC) has eight missions including the National Mission on Enhanced Energy Efficiency. CCUS adds a new dimension — not just reducing energy consumption but actively removing carbon from industrial processes.
- The PAT scheme covers 13 sectors including thermal power plants, iron & steel, cement, fertiliser, and aluminium.
- CCUS deployment at scale requires regulatory frameworks for CO2 transport pipelines, storage liability, and monitoring — currently absent in India.
- CCUS-produced fuels (e-fuels, synthetic methanol) are also relevant for India's hydrogen and clean fuel ambitions under the National Green Hydrogen Mission.
- Estimated CCUS potential by 2050: ~750 million tonnes per annum (mtpa) of CO2 capture, creating 8–10 million FTE jobs.
Connection to this news: The Rs 20,000 crore scheme signals that CCUS is now a mainstream policy instrument in India's decarbonisation toolkit, complementing existing energy efficiency and renewable energy programmes.
Key Facts & Data
- Rs 20,000 crore allocated over 5 years (Budget 2026-27) for CCUS across five industrial sectors: power, steel, cement, refineries, chemicals.
- India's CO2 geological storage potential: 500–1,000 gigatons (GT).
- CCUS target by 2050: ~750 mtpa carbon capture, 8–10 million FTE jobs created.
- Technology roadmap phases: R&D/pilots (2025–30), industrial integration (2030–35), commercial scale-up (2035–45).
- Key CO2 storage basins identified: Krishna-Godavari, Rajasthan, Tamil Nadu sedimentary zones.
- India's net-zero target: 2070; NDC emissions intensity target: -45% from 2005 levels by 2030.
- National Centres of Excellence in Carbon Capture and Utilisation: established under DST, one at IIT Bombay.
- NITI Aayog CCUS Policy Framework: published 2022.
- CCUS products: synthetic fuels (methane, methanol), food-grade CO2, building materials, specialty chemicals, pharma-grade CO2.