What Happened
- Union Budget 2026-27 allocated Rs 20,000 crore (approximately $2.2 billion) over five years to scale up Carbon Capture, Utilisation, and Storage (CCUS) technologies in five hard-to-abate industrial sectors.
- The five targeted sectors are: power, steel, cement, refineries, and chemicals — collectively responsible for a substantial share of India's industrial CO₂ emissions.
- The allocation follows India's Department of Science and Technology releasing a national R&D Roadmap for CCUS in December 2025, which targets capturing 750 million tonnes of CO₂ from hard-to-abate sectors by 2050.
- ONGC has announced its first full-scale CCS pilot at the Gandhar oilfield in Gujarat, capturing approximately 100 tonnes of CO₂ per day from nearby industrial units and injecting it into depleted onshore wells.
- The budget allocation represents a policy shift from pilot projects to policy-backed deployment, embedding CCUS within India's Net Zero 2070 strategy.
Static Topic Bridges
Carbon Capture, Utilisation, and Storage (CCUS) Technology
CCUS refers to the process of capturing carbon dioxide (CO₂) emissions from industrial sources or the atmosphere, transporting the captured gas, and either storing it permanently underground or utilising it as a feedstock in other industrial processes. It is considered critical for decarbonising hard-to-abate sectors where direct electrification or fuel-switching is technically difficult or economically prohibitive.
- Pre-combustion capture: Fossil fuel is converted into a blend of CO₂ and hydrogen before combustion; CO₂ is extracted, and hydrogen is used as a low-carbon fuel.
- Post-combustion capture: CO₂ is removed from exhaust gases after combustion using chemical solvents or filters — the most widely deployed method today.
- Oxy-fuel combustion: Fuel is burned in pure oxygen rather than air, producing a flue gas of concentrated CO₂ and steam that is easier to capture.
- Direct Air Capture (DAC): Extracts CO₂ directly from ambient air; highly energy-intensive but theoretically applicable anywhere.
- India's DST CCUS Roadmap (December 2025) projects that CCUS can reduce emissions by 329 MtCO₂e annually by 2050 and 403 MtCO₂e by 2070.
Connection to this news: The Rs 20,000 crore scheme funds the deployment of these capture technologies across five industrial sectors, transitioning India's CCUS efforts from R&D experiments to large-scale industrial application.
India's Climate Commitments: NDC and Net Zero 2070
India submitted updated Nationally Determined Contributions (NDCs) under the Paris Agreement. India's updated NDC (2022) commits to: reducing emissions intensity of GDP by 45% from 2005 levels by 2030; achieving about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. India's long-term strategy to the UNFCCC targets net zero greenhouse gas emissions by 2070.
- India is among the top four greenhouse gas emitters globally but has among the lowest per-capita emissions.
- The Paris Agreement's Article 4 requires countries to prepare, communicate, and maintain successive NDCs, with each successive NDC representing a progression.
- Hard-to-abate sectors (steel, cement, chemicals) account for approximately 30% of global CO₂ emissions and cannot easily be decarbonised through electrification alone — making CCUS essential.
- India's net-zero target of 2070 is 20 years later than the global average target of 2050, reflecting India's principle of Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC).
Connection to this news: The CCUS budget allocation is a direct implementation mechanism for India's Net Zero 2070 pathway, targeting the sectors that cannot reach net-zero through renewable energy substitution alone.
Climate Finance and the Green Climate Fund
Climate finance refers to local, national, or transnational financing drawn from public, private, and alternative sources that seeks to support mitigation and adaptation actions. Article 9 of the Paris Agreement obligates developed countries to provide financial resources to assist developing countries. The Green Climate Fund (GCF), established under the UNFCCC, is the primary multilateral fund for channelling climate finance to developing nations.
- At COP29 (Baku, 2024), the New Collective Quantified Goal (NCQG) on climate finance was set at $300 billion per year by 2035 from developed to developing countries — far below the $1.3 trillion estimated as needed.
- India's domestic climate finance needs are estimated in trillions of dollars through 2070 to achieve its net-zero goal.
- The Rs 20,000 crore CCUS scheme uses domestic public finance, signalling that India cannot rely solely on international climate finance for its decarbonisation pathway.
- Carbon markets (Article 6 of the Paris Agreement) allow countries and companies to trade carbon credits, potentially providing a financial mechanism to support CCUS deployment.
Connection to this news: The domestic budget allocation for CCUS underscores the gap between available international climate finance and India's actual decarbonisation needs, making domestic fiscal commitments to industrial decarbonisation critical.
Key Facts & Data
- Budget allocation: Rs 20,000 crore (~$2.2 billion) over five years for CCUS in power, steel, cement, refineries, and chemicals
- DST CCUS Roadmap target: capture 750 million tonnes of CO₂ by 2050 from hard-to-abate sectors
- ONGC Gandhar pilot: ~100 tonnes CO₂/day captured and injected into depleted wells in Gujarat
- CCUS projected impact: 329 MtCO₂e reduction annually by 2050; 403 MtCO₂e by 2070
- India's NDC: 45% reduction in emissions intensity of GDP from 2005 levels by 2030; 50% non-fossil electric capacity by 2030
- India's net-zero target: 2070 (under Paris Agreement Long-Term Low Emission Development Strategy)
- Hard-to-abate sectors: responsible for ~30% of global CO₂ emissions