In a major step towards India’s net-zero ambitions, Finance Minister Nirmala Sitharaman announced an allocation of ₹20,000 crore over the next five years for Carbon Capture, Utilisation and Storage (CCUS) technologies in the Union Budget 2026–27, presented on February 1.
The funding aims to accelerate the deployment of CCUS across hard-to-abate industrial sectors, enabling India to meet its climate commitments while sustaining economic growth.
CCUS involves capturing carbon dioxide emissions from industrial sources, utilising the captured CO₂ in products such as chemicals or enhanced oil recovery, or storing it permanently underground to prevent its release into the atmosphere. The technology is considered crucial for decarbonising sectors where emissions are difficult to eliminate through renewable energy alone, including power generation, steel production, cement manufacturing, refineries and chemicals.
These industries form the backbone of India’s heavy manufacturing base and contribute significantly to the country’s greenhouse gas emissions.
The finance minister said the outlay would support the scaling up of CCUS technologies and help achieve higher technology readiness levels for end-use applications across these five key sectors.
The initiative aligns with the government’s CCUS roadmap launched in 2025, which outlines pathways for technology maturation, pilot projects and eventual commercial rollout.
By investing in research, demonstration plants, infrastructure for CO₂ transport and storage, and incentives for adoption, the proposal seeks to build domestic capabilities and reduce reliance on imported solutions.
The move comes amid tightening global climate regulations, including the European Union’s Carbon Border Adjustment Mechanism (CBAM), which imposes tariffs on high-carbon imports such as steel and chemicals.
The allocation is expected to help Indian exporters, particularly in the steel and chemicals sectors, remain competitive in international markets by lowering their carbon footprint.
The ₹20,000 crore commitment marks a pragmatic shift in India’s decarbonisation strategy, focusing on practical solutions for emission-intensive industries rather than relying solely on renewable energy expansion.
The funding could also spur private sector participation through public-private partnerships, encourage technology indigenisation, and generate employment in green engineering and carbon storage operations. Industry stakeholders view the move as a boost to sustainability initiatives and ESG compliance.
The proposal integrates with broader green infrastructure initiatives announced in the Budget, including investments in high-speed rail corridors and inland waterways, signalling a more holistic approach to sustainable development.
As implementation details emerge, the success of the CCUS push will depend on effective policy execution, robust regulatory frameworks for carbon markets, and international collaboration for technology transfer.
With this announcement, India aims to turn a climate challenge into an opportunity for innovation and industrial resilience on the path to Viksit Bharat.
(IANS)
