India's ₹20,000 Cr Bet on Carbon Capture

India's Budget 2026-27 marks a deepened commitment to its net-zero objectives with a ₹20,000 crore allocation for carbon capture, utilisation, and storage (CCUS). This initiative acknowledges emissions that persist despite energy substitution efforts, aligning climate ambition with industrial realities.

CCUS serves as a complementary decarbonisation strategy, enabling the extension of India's young industrial asset base without imposing significant economic or social costs. This approach prioritizes climate action alongside economic growth and employment.

Initial public funding will target pilot facilities and shared infrastructure, lowering entry barriers for industries and technology providers. This strategy aims to standardize systems, reduce costs, and build operational confidence.

Global experience highlights the importance of long-term incentives and clear regulatory frameworks for CCUS deployment. India, entering this field, can leverage these lessons to align CCUS with its unique industrial corridors and energy hubs.

A cluster-based approach for CCUS is strategic, reducing unit costs and simplifying regulations. Developing domestic capabilities in CCUS engineering and monitoring fosters industrial growth and skilled employment.

Simplified consent mechanisms for small-scale CCUS test beds and potential GST provisions for captured carbon products can further encourage investment. Policy coherence with emerging market mechanisms, like a carbon credit trading scheme, will be crucial.

These critical issues will be further explored at the World Sustainable Development Summit (WSDS) 2026, scheduled for February 25-27 in New Delhi, convening experts to discuss transition pathways.