India to spend over 20,000 crore on carbon capture technology in next 5 years
India has announced major funding for a debated climate solution. In the Union Budget 2026–27, the finance minister proposed ₹20,000 crore over five years to expand Carbon Capture, Utilisation and Storage (CCUS) across five industries that are power, steel, cement, refineries, and chemicals. It suggests India is stepping up its approach to tackling climate change. But what is this technology, and can it truly live up to the expectations?
CCUS is the process of capturing carbon dioxide, typically from large sources such as power plants or industrial units that run on fossil fuels or biomass. If the CO₂ isn’t reused at the same site, it is compressed and moved via pipelines, ships, rail, or trucks for different uses, or stored underground by injecting it into deep geological structures like depleted oil and gas fields or saline aquifers.
How CCUS can help in the climate change fight
Renewables work well for things like household electricity and transport. But for heavy industries such as steel, cement, and chemicals, the challenge is tougher. These “hard-to-abate” sectors depend on high heat and chemical processes that renewables alone can’t easily replace.
India is the second-largest producer of steel and cement globally, and these materials are essential for building cities, bridges, and homes. CCUS is often seen as a compromise solution, letting these key industries expand while lowering their climate impact. Supporters call it an important bridge toward India’s Net Zero target for 2070.
The International Energy Agency says CCUS can play four key roles on the road to net zero: reducing emissions from existing facilities, helping decarbonise hard-to-abate sectors, supporting low-carbon hydrogen production, and enabling carbon removal when combined with bioenergy or direct air capture.
Rohit Kumar , Secretary General, Carbon Markets Association of India, says "It is very good step being taken by the government.However, we are loosing time.We need to act on this issue in a time bound mission mode manner." He further says , " We need to convert this captured carbon into fuel.It will reduce our crude oil import bill."
Current status of CCUS in India
India isn’t beginning from scratch. A well-known commercial example is in Tuticorin (Thoothukudi), where captured CO₂ is used to make soda ash, with reports and case material estimating roughly 60,000 tonnes of CO₂ captured each year.
Another frequently mentioned initiative is at NTPC’s Vindhyachal plant. Carbon capture started there in 2022, and in 2025, the project reached a milestone when the captured CO₂ was used to produce its first methanol—showing how captured carbon can be converted into fuels or chemicals.
The Budget speech also ties this fresh funding to a roadmap unveiled in December 2025, indicating the government wants to move beyond pilots and scale up to larger, deployment-ready projects.
Working of CCUS abroad
Around the world, CCUS also has a few well-known benchmarks. Norway’s Northern Lights began operations in August 2025 and has already stored CO₂ shipped from a cement plant, with plans to provide cross-border CO₂ transport and offshore storage as a service.
In Canada, Boundary Dam Unit 3 is often cited as a commercial-scale project in the power sector, built to capture a significant portion of CO₂ from a coal-fired unit, something the operator says can reach “up to 90%” capture.
There are older examples too, such as the Sleipner project in the North Sea, which has been injecting CO₂ into underground storage since 1996 and is widely seen as the first commercial offshore CCS project.
Limitations of CCUS
CCUS is expensive. The capture systems are costly to install, and they often require extra power to operate. This “energy penalty” can lower efficiency and push up running expenses.
It also depends on infrastructure that India largely lacks today. Large-scale projects need pipelines or shipping corridors, properly identified and mapped storage locations, and clear legal frameworks, especially around long-term responsibility if stored CO₂ leaks decades later. Without this foundation, most efforts remain limited to small pilots.
There are concerns about how well it performs in practice. Some headline projects have faced setbacks. An IEEFA assessment of Australia’s Gorgon CCS project pointed to poor capture results in 2023–24 and higher costs per tonne captured, raising questions about reliability at scale.
Beyond the technical issues, there’s a bigger argument about direction: does CCUS delay the move away from fossil fuels? Critics say it could become a justification to keep using coal and gas. Supporters counter that for industrial emissions that can’t be eliminated quickly, it may be one of the few workable options. Even in steel, where many firms mention CCUS in their plans, it is unlikely to play a major role because it remains expensive and has seen limited progress, while alternatives like hydrogen-based pathways are moving ahead.
The ₹20,000 crore allocation is meant to scale today’s small pilots into large, industrial-grade projects. It aims to support the development of pipelines and shared storage hubs for key infrastructure that can lower costs over time.
CCUS isn’t a standalone answer to climate change, but for a fast-growing country like India, it can serve as a crucial backstop. The technology is complex and costly, yet with the planet warming rapidly, it’s a lever India can’t afford to dismiss.
#CarbonCapture #CCUS #IndiaBudget2026 #ClimateChange #NetZero2070 #GlobalWarming #GreenTechnology #IndustrialEmissions #Decarbonization #EnvironmentalNews #CarbonStorage #CleanEnergy
India to spend over 20,000 crore on carbon capture technology in next 5 years
India has announced major funding for a debated climate solution. In the Union Budget 2026–27, the finance minister proposed ₹20,000 crore over five years to expand Carbon Capture, Utilisation and Storage (CCUS) across five industries that are power, steel, cement, refineries, and chemicals. It suggests India is stepping up its approach to tackling climate change. But what is this technology, and can it truly live up to the expectations?
CCUS is the process of capturing carbon dioxide, typically from large sources such as power plants or industrial units that run on fossil fuels or biomass. If the CO₂ isn’t reused at the same site, it is compressed and moved via pipelines, ships, rail, or trucks for different uses, or stored underground by injecting it into deep geological structures like depleted oil and gas fields or saline aquifers.
How CCUS can help in the climate change fight
Renewables work well for things like household electricity and transport. But for heavy industries such as steel, cement, and chemicals, the challenge is tougher. These “hard-to-abate” sectors depend on high heat and chemical processes that renewables alone can’t easily replace.
India is the second-largest producer of steel and cement globally, and these materials are essential for building cities, bridges, and homes. CCUS is often seen as a compromise solution, letting these key industries expand while lowering their climate impact. Supporters call it an important bridge toward India’s Net Zero target for 2070.
The International Energy Agency says CCUS can play four key roles on the road to net zero: reducing emissions from existing facilities, helping decarbonise hard-to-abate sectors, supporting low-carbon hydrogen production, and enabling carbon removal when combined with bioenergy or direct air capture.
Rohit Kumar , Secretary General, Carbon Markets Association of India, says "It is very good step being taken by the government.However, we are loosing time.We need to act on this issue in a time bound mission mode manner." He further says , " We need to convert this captured carbon into fuel.It will reduce our crude oil import bill."
Current status of CCUS in India
India isn’t beginning from scratch. A well-known commercial example is in Tuticorin (Thoothukudi), where captured CO₂ is used to make soda ash, with reports and case material estimating roughly 60,000 tonnes of CO₂ captured each year.
Another frequently mentioned initiative is at NTPC’s Vindhyachal plant. Carbon capture started there in 2022, and in 2025, the project reached a milestone when the captured CO₂ was used to produce its first methanol—showing how captured carbon can be converted into fuels or chemicals.
The Budget speech also ties this fresh funding to a roadmap unveiled in December 2025, indicating the government wants to move beyond pilots and scale up to larger, deployment-ready projects.
Working of CCUS abroad
Around the world, CCUS also has a few well-known benchmarks. Norway’s Northern Lights began operations in August 2025 and has already stored CO₂ shipped from a cement plant, with plans to provide cross-border CO₂ transport and offshore storage as a service.
In Canada, Boundary Dam Unit 3 is often cited as a commercial-scale project in the power sector, built to capture a significant portion of CO₂ from a coal-fired unit, something the operator says can reach “up to 90%” capture.
There are older examples too, such as the Sleipner project in the North Sea, which has been injecting CO₂ into underground storage since 1996 and is widely seen as the first commercial offshore CCS project.
Limitations of CCUS
CCUS is expensive. The capture systems are costly to install, and they often require extra power to operate. This “energy penalty” can lower efficiency and push up running expenses.
It also depends on infrastructure that India largely lacks today. Large-scale projects need pipelines or shipping corridors, properly identified and mapped storage locations, and clear legal frameworks, especially around long-term responsibility if stored CO₂ leaks decades later. Without this foundation, most efforts remain limited to small pilots.
There are concerns about how well it performs in practice. Some headline projects have faced setbacks. An IEEFA assessment of Australia’s Gorgon CCS project pointed to poor capture results in 2023–24 and higher costs per tonne captured, raising questions about reliability at scale.
Beyond the technical issues, there’s a bigger argument about direction: does CCUS delay the move away from fossil fuels? Critics say it could become a justification to keep using coal and gas. Supporters counter that for industrial emissions that can’t be eliminated quickly, it may be one of the few workable options. Even in steel, where many firms mention CCUS in their plans, it is unlikely to play a major role because it remains expensive and has seen limited progress, while alternatives like hydrogen-based pathways are moving ahead.
The ₹20,000 crore allocation is meant to scale today’s small pilots into large, industrial-grade projects. It aims to support the development of pipelines and shared storage hubs for key infrastructure that can lower costs over time.
CCUS isn’t a standalone answer to climate change, but for a fast-growing country like India, it can serve as a crucial backstop. The technology is complex and costly, yet with the planet warming rapidly, it’s a lever India can’t afford to dismiss.
#CarbonCapture #CCUS #IndiaBudget2026 #ClimateChange #NetZero2070 #GlobalWarming #GreenTechnology #IndustrialEmissions #Decarbonization #EnvironmentalNews #CarbonStorage #CleanEnergy
