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Rs20,000 Crore Budget Push Aims to Accelerate Commercial Carbon Capture in India

India’s move to allocate Rs20,000 crore in the Union Budget for carbon capture, utilisation and storage (CCUS) signals a stronger push toward commercial-scale deployment of the technology. The funding is expected to help India curb industrial emissions while staying aligned with its Net Zero target for 2070, even as the country continues to expand its manufacturing and infrastructure base.

CCUS is increasingly viewed as a practical decarbonisation tool for hard-to-abate sectors such as steel, cement, refining, aluminium and chemicals—industries that together account for a significant share of national emissions. Policy experts note that structured financial support could enable the development of multiple carbon capture and storage projects over the next five years, potentially building 10–15 million tonnes per annum (MTPA) of capture capacity in the initial phase.

According to assessments prepared in collaboration with NITI Aayog, India will need a well-defined policy framework and deployment mechanism to transition CCUS from pilot initiatives to large-scale commercial adoption. This includes building transport pipelines, storage hubs and integrated capture systems, similar to how electricity grids were scaled in earlier decades.

Energy and consulting firms working with public sector companies such as Indian Oil Corporation Limited (IOCL), NTPC Limited, Oil and Natural Gas Corporation (ONGC), and Tata Steel have highlighted the need for anchor projects backed by concessional finance. Proposals include the creation of a dedicated carbon capture finance corporation and the use of green or transition bonds to reduce capital costs.

Globally, CCUS capacity remains limited compared to overall emissions, with operational facilities capturing only a small fraction of annual carbon output. However, India sees the technology as a bridge solution—especially in sectors where electrification or green hydrogen substitution may take longer to scale.

Industry experts emphasize that beyond budgetary allocation, success will depend on three critical pillars: clear regulatory frameworks, linkage with evolving carbon markets, and affordable long-term financing. Technology partnerships and domestic manufacturing capabilities will also play a vital role in lowering capture costs and improving operational efficiency.

While CCUS alone cannot offset the country’s entire emissions profile, policymakers view it as an essential component of India’s broader green transition strategy—balancing economic growth ambitions with climate commitments and the long-term goal of building a low-carbon industrial ecosystem.