India’s Carbon Conundrum, Why CCUS is the Linchpin of Its Net-Zero Ambition
As the world grapples with the accelerating climate crisis, the race to net-zero emissions has become the defining challenge of the 21st century. For India—a rapidly industrializing nation of 1.4 billion people—this challenge is uniquely complex. The country is committed to achieving net-zero by 2070, yet its near-to-medium-term economic trajectory, driven by massive construction, industrial expansion, and energy demand, all but guarantees a rise in greenhouse gas emissions. This paradox underscores why Carbon Capture, Utilization, and Storage (CCUS) is not merely a supplementary technology for India, but a critical, indispensable pillar of its climate strategy. The recent budgetary allocation of ₹20,000 crore over five years for CCUS development is a landmark acknowledgment of this reality, signaling India’s intent to build a decarbonized future without sacrificing its developmental aspirations.
The Inescapable Math: Growth vs. Emissions
India’s climate dilemma is rooted in basic arithmetic. As a developing economy, its per capita emissions remain well below the global average, but its aggregate emissions are the third-largest in the world and growing. Sectors fundamental to nation-building—steel, cement, chemicals, refining, and power generation—are both energy-intensive and “hard-to-abate.” Unlike the electricity grid, which can be progressively greened with renewables like solar and wind, the industrial processes in these sectors have inherent, process-based CO₂ emissions.
For instance, in cement production, roughly 60% of CO₂ emissions come from the chemical calcination of limestone, not from the energy used. Similarly, in steelmaking, the basic chemical reaction in a blast furnace releases CO₂. Merely powering these plants with renewable electricity addresses only the combustion-related emissions, leaving a massive, stubborn chunk of process emissions untouched. For these sectors to survive and thrive in a carbon-constrained world, CCUS is not an option; it is the only viable technological pathway to deep decarbonization.
The Global CCUS Landscape and India’s Nascent Stride
Globally, the CCUS ecosystem is evolving but remains modest in scale. As of 2025, there are about 45 commercial CCUS facilities operational worldwide, capturing approximately 50 million tonnes of CO₂ per year. This is a fraction of the billions of tonnes that need to be captured annually to meet global climate goals. Projections suggest capacity could scale to around 300 million tonnes per year by 2030, indicating a significant acceleration, but one that remains fraught with technical and financial hurdles.
India’s position in this landscape is that of a determined, strategic latecomer. The journey began in earnest after the 2021 Glasgow Climate Pact (COP26), where India announced its 2070 net-zero target. Since then, the focus has shifted from abstract commitment to concrete technological groundwork.
The current Indian CCUS ecosystem is characterized by:
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Pilot Projects: Pioneering efforts by industry giants like Tata Steel, Dalmia Cement, NTPC, and ONGC to test capture technologies in real-world industrial settings.
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Research Momentum: Dozens of active research groups across institutions like IITs, IISc, and CSIR labs are innovating across the CCUS value chain.
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Centres of Excellence: Dedicated hubs like the DST-National Centre of Excellence in CCUS at IIT Bombay and efforts at JNCASR, Bengaluru, are spearheading indigenous technology development.
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Strategic Roadmapping: The Department of Science and Technology’s CCUS R&D Roadmap for 2030 has systematically identified technology gaps, financing needs, and policy bottlenecks.
However, the transition from promising lab-scale prototypes and small pilots to commercially viable, gigatonne-scale deployment is a formidable “valley of death” that few technologies cross without substantial state support.
Budget 2026: The Game-Changing Catalyst
The ₹20,000 crore budgetary allocation is a targeted intervention designed to bridge this very valley. Its genius lies in its focus on “achieving higher Technology Readiness Levels (TRLs) in end-applications.” In simpler terms, it is funding to move technologies from the lab and pilot stage (TRL 4-6) to demonstration and early commercial deployment (TRL 7-9) specifically within Indian industrial contexts.
As Professor Vikram Vishal of IIT Bombay’s CCUS Centre of Excellence explains, this is “a game-changing move.” Numerous indigenous technologies are “ready for being tried out for commercialisation,” but scaling them to capture 100 to 500 tonnes of CO₂ per day—the scale needed for meaningful impact and economic viability—requires capital that the private sector has been hesitant to provide due to high costs and uncertain returns. The government’s commitment de-risks this crucial scaling phase. Professor Vishal’s projection that “we will see several CCUS technologies get commercially deployed in India in the next five years” hinges on this very infusion of catalytic capital.
The Multiplier Benefits: Economy, Trade, and Leadership
Investing in CCUS is not just an environmental imperative for India; it is a strategic economic one.
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Preserving Core Industries: Steel, cement, and chemicals form the backbone of infrastructure, manufacturing, and urbanization. Allowing these sectors to become obsolete or uncompetitive due to climate policy is not an option. CCUS enables them to continue operating, modernize, and become green champions, safeguarding millions of jobs and economic value.
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Navigating Green Trade Barriers: The European Union’s Carbon Border Adjustment Mechanism (CBAM) is a reality. It imposes tariffs on imports based on their embedded carbon footprint. For Indian exporters in steel, cement, and aluminum, this is a direct threat to market access. Deploying CCUS is the most effective way to dramatically lower the carbon intensity of these products, ensuring they remain competitive in critical export markets and protecting India’s share in global trade.
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Fostering Technological Sovereignty: By developing and scaling indigenous CCUS solutions suited to Indian flue gas compositions, geological storage sites, and economic conditions, India avoids perpetual dependence on expensive foreign licenses. It can create a new advanced manufacturing sector, generate intellectual property, and potentially export technology and services to other developing nations facing similar challenges.
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Unlocking the “U” in CCUS: The utilization aspect is a potential economic engine. Captured CO₂ can be converted into valuable products: building materials (like carbon-cured concrete), chemicals, fuels (like methanol), and even in enhanced oil recovery (EOR). This can create circular economies, turning a waste liability into a revenue stream and further improving the business case for capture.
The Daunting Challenges on the Path Ahead
Despite the budgetary boost, the road to a functional, large-scale CCUS industry is steep.
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Cost: Capture is energy-intensive, adding significant operational costs (the “energy penalty”). The entire chain—capture, compression, transport (via pipeline or ship), and secure storage—is capital-heavy. The budget addresses the R&D and demo cost, but creating a sustainable market will require mechanisms like carbon pricing, tax credits, or mandates.
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Infrastructure: A nationwide CCUS network requires a massive new infrastructure spine: thousands of kilometers of CO₂ pipelines and identified, permitted, and monitored geological storage sites (in depleted oil/gas fields or deep saline aquifers). This demands land acquisition, regulatory frameworks, and public acceptance.
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Storage Integrity and Monitoring: Ensuring that injected CO₂ remains permanently sequestered underground for millennia is paramount. Robust measurement, monitoring, and verification (MMV) protocols and long-term liability frameworks need to be established.
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Policy and Regulation: A clear, stable, and supportive policy environment is essential. This includes standards for CO₂ purity, pipeline safety regulations, clear ownership of subsurface pore space for storage, and a long-term governance model.
A Pragmatic and Necessary Bet
Critics often argue that CCUS is a distraction, a “techno-fix” that prolongs the life of fossil fuels and diverts investment from renewables and efficiency. For India, this is a false dichotomy. The nation is already a global leader in renewable energy expansion. CCUS is not an alternative to that transition but a necessary complement for the segments of the economy that renewables alone cannot decarbonize.
India’s approach, as crystallized in this budget, is notably pragmatic. It is investing in the innovation required to bend the cost curve down and build a home-grown industry. It recognizes that for a country still lifting millions out of poverty and building its cities, an orderly transition that protects industry and jobs is non-negotiable.
Conclusion: Building the Bridge to 2070
The ₹20,000 crore for CCUS is more than a line item; it is a down payment on India’s climate-compatible future. It acknowledges that the path to net-zero is not a single leap but a marathon requiring a diverse portfolio of solutions. By strategically betting on CCUS, India is building a vital bridge—a bridge that allows its foundational industries to cross from the high-carbon present to a low-carbon future without collapsing. It is an investment in national competitiveness, technological sovereignty, and ultimately, in the feasibility of its own 2070 net-zero promise. In the high-stakes calculus of climate and development, carbon capture has emerged as India’s key variable, and with this budget, the nation has begun to solve for it in earnest.
Q&A
Q1: Why is CCUS considered especially critical for India, despite its push for renewable energy?
A1: India’s emissions are set to rise due to necessary industrial and construction growth. Key sectors like cement and steel have “process emissions”—CO₂ released as an intrinsic part of production chemistry, not just from burning fuel. Renewable energy can only address fuel-related emissions. CCUS is the only technological pathway to capture and neutralize these unavoidable process emissions, allowing these foundational industries to decarbonize and survive in a carbon-constrained world while India continues to develop.
Q2: What is the significance of the ₹20,000 crore budgetary allocation for CCUS over five years?
A2: This allocation is a catalytic, de-risking intervention aimed at bridging the “valley of death” between lab-scale research and commercial deployment. Its specific goal is to achieve higher Technology Readiness Levels (TRLs) in end-applications—meaning it will fund the scaling and field-testing of indigenous CCUS technologies within Indian power, steel, cement, and chemical plants. This public investment is crucial because the high cost and uncertainty of scaling have deterred sufficient private capital.
Q3: How does developing CCUS technology benefit India’s economy and trade, beyond emissions reduction?
A3: CCUS offers major economic benefits: 1) Trade Competitiveness: It helps Indian steel, cement, and aluminum exporters comply with carbon tariffs like the EU’s Carbon Border Adjustment Mechanism (CBAM), protecting vital export markets. 2) Industrial Preservation: It enables core industries to modernize and thrive, safeguarding jobs and economic value. 3) Technological Sovereignty: Developing indigenous solutions reduces foreign dependence and can create a new advanced manufacturing/export sector. 4) Circular Economy: The “Utilization” of CO₂ to make building materials or fuels can create new revenue streams.
Q4: What are the major challenges that remain for large-scale CCUS deployment in India, even with the new funding?
A4: Key challenges include: 1) High Costs: The “energy penalty” of capture and the capital intensity of the full chain (capture, transport, storage). 2) Infrastructure Gap: The need for a massive new network of CO₂ pipelines and identified, permitted geological storage sites. 3) Regulatory Framework: The absence of clear policies on pipeline safety, subsurface storage rights, long-term liability, and carbon pricing to create a sustainable market. 4) Public Acceptance: Ensuring safe, permanent storage and building social license for the required infrastructure.
Q5: How does India’s CCUS strategy fit within its broader net-zero and climate action plans?
A5: CCUS is a strategic complement, not a substitute, for India’s energy transition. India is aggressively expanding renewables for its power grid. CCUS specifically targets the “hard-to-abate” industrial sectors that renewables cannot fully decarbonize. This dual-track approach—greening the electricity sector while innovating to clean up industry—represents a pragmatic and comprehensive strategy to meet its 2070 net-zero goal without derailing economic development, making its climate action plan more credible and achievable.
