Union Finance Minister has announced a
dedicated scheme for carbon capture, storage, and utilization
In the Union Budget 2026-27, the Union Finance
Minister announced an outlay of ₹20,000 crore over the next five years through
a dedicated scheme for Carbon Capture, Storage, and Utilization (CCUS).The
scheme aims to scale up CCUS technologies from pilot projects to commercial
deployment.It will support decarbonization efforts in five emission-intensive
“hard-to-abate” sectors: power, steel, cement, refineries, and
chemicals.Earlier, an expert committee of the Department of Science and
Technology (DST) submitted a report in December 2025, outlining a strategic,
technological, and regulatory roadmap for CCUS in India to help achieve the
‘net-zero’ target by 2070.
Carbon Capture, Utilization, and Storage
(CCUS)
¨
CCUS typically involves
capturing CO2 from large ‘point sources’ such as power generation or industrial
facilities that use fossil fuels or biomass as fuel.
¨
If not used on-site, the
captured CO2 is compressed and transported by pipeline, ship, rail, or truck
for use in various applications, or it is injected into deep geological
formations such as depleted oil and gas reservoirs or saline aquifers.
¨
The aim is to prevent
carbon dioxide from entering the atmosphere, thereby mitigating global warming.
Role of CCUS in Climate Strategy
¨
CCUS is viewed as a
complementary tool for decarbonization rather than an alternative to renewable
energy.
¨
CCUS plays a crucial role
in mitigating residual emissions from ‘hard-to-abate’ sectors and supports the
production of low-carbon hydrogen (blue hydrogen) and other synthetic fuels.
Recent global climate conferences like COP26 and COP28 have highlighted the potential
role of CCUS, while also cautioning against continued reliance on fossil fuels
and emphasizing that CCUS should not delay the clean energy transition.
Importance of CCUS for India
¨
Enabling Net-Zero and
Industrial Decarbonization: It is crucial for the decarbonization of sectors
like steel, cement, power, refineries, and chemicals, where emissions are
process-related. This directly supports India's commitment to achieving
net-zero emissions by 2070.
¨
When combined with
biomass (BECCS) or Direct Air Capture (DAC), it can actively remove CO₂ from
the atmosphere, leading to negative emissions.
¨
Strategic Autonomy and
Indigenous Capability: By encouraging domestic research and development, CCUS
reduces dependence on imported technologies and strengthens India's clean-tech
ecosystem, aligning with the 'Atmanirbhar Bharat' (Self-Reliant India) goals.
¨
Circular Carbon Economy:
CCUS enables the reuse of captured CO₂ in synthetic fuels, fertilizers,
construction materials, and industrial gases, transforming emissions into
economic value.
¨
Trade Competitiveness:
CCUS is also important in light of measures like the Carbon Border Adjustment
Mechanism (CBAM) imposed by the European Union on imports from countries that
use more carbon than their domestic manufacturers.
CCUS Pilot Projects in India
¨
NTPC has initiated carbon
capture at its Vindhyachal Thermal Power Station, capturing approximately 20
tonnes of CO₂ per day. The captured carbon dioxide is used for methanol
production with green hydrogen.
¨ NTPC also commissioned India's first geological CO₂ storage borewell in Jharkhand in 2025.
¨ ONGC has launched its first CCS pilot in the Gandhar oil field in Gujarat, where CO₂ is being injected into depleted wells. Tata Steel and JSW Steel have commissioned CCUS pilot plants in Jamshedpur and Dolvi, respectively.
