Budget 2026-27’s allocation of ₹20,000 crore for carbon capture, utilisation and storage (CCUS) marks the beginning of a deeper commitment in India’s net-zero journey. It signals readiness to engage with a category of emissions that cannot be addressed through energy substitution alone. It reflects a point where climate ambition is being aligned with industrial realism.
CCUS enters India’s decarbonisation landscape as a complementary solution. It addresses emissions that persist even after efficiency gains and clean energy adoption have been realised. The country operates one of the youngest industrial asset bases globally, and premature retirement of these assets would impose significant economic and social costs. Carbon capture offers a pathway to extend asset life while reducing environmental impact. This approach aligns closely with India’s development priorities. Climate action must proceed alongside growth, employment, and competitiveness. Its inclusion in the budget reflects an understanding that the next phase of decarbonisation will rely less on substitution, and more on transformation within existing industrial systems.
Carbon capture systems involve high upfront costs, complex integration with operating facilities, and long payback periods. Private capital typically enters such spaces once regulatory frameworks, risk-sharing mechanisms, and long-term policy intent are clearly established.
The commitment also reflects an appreciation of deployment sequencing. Early public funding supports pilot facilities, shared transport infrastructure, and storage characterisation. Their presence lowers entry barriers for industrial operators and technology providers, while helping standardise systems, reduce costs, and build operational confidence over time.
Measured against India’s scale, the allocation is not intended to deliver immediate transformation. By committing public resources at this stage, the government has created space for industry, research institutions, and investors to align around a shared direction. The outcomes will depend on how effectively this signal is translated into coordinated execution across stakeholders.
Global experience with CCUS offers useful guidance. Over the past two decades, several countries have moved from research to industrial-scale facilities. Where CCUS has progressed, long-term incentives, clarity on storage responsibility, and predictable revenue mechanisms have supported deployment. Where these elements remained uncertain, progress slowed despite technical readiness.
Utilisation pathways explored globally provide additional insight. Early efforts often focussed on small-volume applications with limited climate impact, primarily to establish operational experience. More recent approaches evaluate emissions across the full life cycle of utilisation pathways, to determine whether they deliver net climate benefit or permanent removal compared to baseline products.
India enters this field at a point where these lessons are well established. Deployment can be aligned with existing industrial corridors, ports, and energy hubs. By focusing on scale, permanence, and coordination, India can shorten the learning curve navigated elsewhere.
At the same time, India’s geography, consumption patterns, production pathways, circular economy, and industrial ecology will evolve along a trajectory distinct from earlier phases of global industrial development. Greater effectiveness will come from approaches designed around local and regional realities, rather than the direct import of technologies, policies, or regulatory frameworks developed elsewhere. Global experience remains valuable as a reference point, offering lessons that can inform the design of an Indian CCUS architecture suited to domestic conditions.
Viewed through an industrial lens, CCUS represents a strategic opportunity. Heavy industry operates on long investment cycles, with plants designed to function over several decades. CCUS enables the alignment of these assets with evolving climate expectations, without disrupting supply chains or employment at scale.
The strategic value of CCUS increases when pursued through a cluster-based approach. Concentrating capture facilities within such clusters reduces unit costs, simplifies regulation, and strengthens shared responsibility across the CCUS value chain. Engineering, construction, monitoring, and verification systems associated with CCUS represent areas of potential industrial growth. Building these capabilities within India supports skilled employment and reduces reliance on imported solutions.
Small-scale CCUS test beds, particularly facilities in the range of ten tonnes per day, are intended to generate learning rather than commercial output. Exemption from standard consent and approval requirements for such installations can materially reduce timelines and costs. Simplified consent mechanisms, supported by standard operating conditions, would enable faster experimentation while maintaining environmental safeguards.
Products derived from captured carbon can benefit from specific provisions within the Goods and Services Tax framework. Time-bound tax incentives on income from CCU product sales, including defined initial tax holidays, can further support early investment. Together, these measures provide clarity across investment, production, sales, and taxation, improving project bankability and encouraging participation from the business community.
Alignment with emerging market mechanisms will be equally important. As India develops its carbon credit trading scheme, recognition of verified CCUS outcomes can enhance long-term project relevance. Policy coherence across transition technologies will further support adoption. Renewable energy provisions that recognise the system value of green hydrogen provide a useful reference. It can support industrial competitiveness, protect employment, and strengthen India’s position in global value chains. The budget has created these opportunities. The task ahead lies in translating intent into durable infrastructure and credible outcomes.
These issues will find deeper reflection at the World Sustainable Development Summit (WSDS) 2026, to be held from 25–27 February in New Delhi. As India’s flagship global sustainability platform, the Summit will convene policymakers, industry leaders, researchers, and international partners to deliberate on critical transition pathways, including carbon capture, utilisation and storage, the future of multilateral cooperation, green manufacturing, energy transitions, and financing mechanisms for net-zero development. The conversations at WSDS 2026 will be central to shaping how emerging technologies like CCUS are integrated into India’s broader climate and industrial strategy.
Mr Mahendra Singhi is member, governing council, TERI & member of the board of directors and strategic advisor, Dalmia Cement (Bharat) limited, and advisor, WSDS 2026. Mr Anupam Badola is deputy CSO and general manager, Dalmia Cement (Bharat) Limited and contributor, WSDS 2026. The views expressed are personal
