CCUS Technology in India: Opportunities, Challenges and Global Examples

Context

In the Union Budget 2026-27, Finance Minister Nirmala Sitharaman announced a major scheme to incentivize Carbon Capture, Utilization, and Storage (CCUS) technologies.

Key Features of the Budget 2026 Scheme

• Financial Outlay: ₹20,000 crore over 5 years.
• Focus Sectors: Targeted at five “hard-to-abate” sectors: Power, Steel, Cement, Refineries, and Chemicals.
• Objective: Scaling up Technology Readiness Levels (TRL) from laboratory research to industrial-scale pilot and demonstration projects.
• Complements the “R&D Roadmap for CCUS” launched by the Department of Science and Technology in December 2025.

About Carbon Capture, Utilisation,n and Storage

• Carbon Capture, Utilization, and Storage (CCUS) refers to a set of technologies designed to capture carbon dioxide (CO₂) emissions from large point sources and either reuse them in industrial processes or store them permanently in geological formations.
• CCUS is considered a crucial tool for decarbonising “hard-to-abate” sectors where electrification alone cannot eliminate emissions.

Potential Role of CCUS in Tackling Climate Change

• Mitigation of Industrial Emissions: Reduces emissions from hard-to-abate sectors like steel, cement, and fertilizers where renewable substitution is limited.
  • E.g., Norway’s Sleipner Project captures about one million tonnes of CO₂ annually from its offshore natural gas production and injects it into deep saline aquifers in  North Sea.
• Complement to Renewable Energy: Complements renewables by tackling existing emissions and enabling low-carbon hydrogen production through Blue Hydrogen.
  • Eg: Shell’s Quest Project in Canada captures over 1 Mt CO₂ annually from hydrogen production.
• Pathway to Negative Emissions: When paired with bioenergy (BECCS), CCUS can deliver net negative emissions, vital for offsetting aviation and shipping.
  • Eg: The Drax power station in the UK is piloting BECCS for large-scale carbon removal.
• Enhancing Energy Security: CO₂ utilization in Enhanced Oil Recovery (EOR) boosts fossil recovery while reducing emissions and improving supply security.
  • Eg: The US Permian Basin EOR projects inject millions of tonnes of captured CO₂ to extract additional oil.
• India’s Potential: India’s sedimentary basins offer 400–600 Gt CO₂ storage potential, making CCUS critical for Net Zero 2070.
  • Captured CO₂ can be converted into value-added products like green urea, methanol, building materials, polymers, and even used in enhanced oil recovery, creating profitable abatement opportunities.
  • Such utilization supports India’s circular economy, reduces imports (e.g., fertilizers, fuels), and contributes to large-scale decarbonization.
  • Eg: NTPC and IOCL are piloting CCUS projects for thermal power plants and refineries.

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