Budget 2026 allocates ₹20,000 crore for CCUS to meet India's net-zero 2070 target

Indian Express - Explained · 15 Feb 2026 · 2 min read
Prelims · Environment Mains · GS3 Environment and biodiversity High relevance

The Union Budget 2026-27 allocated ₹20,000 crore over five years for Carbon Capture, Utilisation and Storage (CCUS) technologies, critical for decarbonizing hard-to-abate industries like steel and cement to achieve India's 2070 net-zero commitment.

Key points

Carbon Capture Utilisation and Storage (CCUS) involves capturing CO2 emissions from industrial processes, compressing them into liquid, and storing or reusing them, as defined by the Department of Science and Technology.

The ₹20,000 crore allocation targets sectors like steel and cement where emissions are hard to abate, aligning with India's pledge at COP26 to reach net-zero by 2070.

NITI Aayog's 2022 report emphasized CCUS as critical for India to halve CO2 emissions by 2050, given coal's continued role in baseload power despite renewable energy growth.

[GS3-Environment] CCUS connects to climate change mitigation strategies under India's Nationally Determined Contributions (NDCs) and the Paris Agreement, though its scalability remains debated.

Global CCUS adoption is limited, with only 40 operational projects capturing 45 Mt CO2 annually—a fraction of China's 12,466 Mt emissions in 2021, per IEA data.

Critics argue CCUS may prolong fossil fuel dependence, as noted by Tianyi Ma, while proponents view it as essential for hard-to-abate sectors like heavy industry.

[GS2-Governance] The funding reflects India's policy shift toward technology-driven climate solutions, complementing existing renewable energy initiatives like the Solar Mission.

The budget follows international trends, with the EU investing $1.5 billion in CCUS and Denmark committing $1.2 billion, signaling global recognition of its role in decarbonization.

Way Forward: India should prioritize R&D partnerships for cost reduction, establish a regulatory framework for CO2 storage, and integrate CCUS with circular economy models like carbon utilization in construction materials.

Key terms

NITI Aayog

The Indian government's premier policy think tank that replaced the Planning Commission in 2015. Its 2022 CCUS report provides the analytical basis for India's climate technology investments, illustrating its role in evidence-based policymaking for sustainable development.

Hard-to-Abate Sectors

Industries like steel, cement, and chemicals where decarbonization is technologically or economically challenging. These are prioritized in CCUS funding due to their high emissions and critical role in India's infrastructure growth, linking industrial policy with climate goals.

Carbon Capture Utilisation and Storage (CCUS)

A technology suite that captures CO2 emissions from industrial sources, compresses them for transport, and either stores them underground (e.g., in geological formations) or repurposes them for industrial use. For UPSC, it's significant as a climate mitigation tool for India's net-zero 2070 goal, particularly in energy-intensive sectors excluded from renewable transitions.

Net-Zero Emissions

A state where a country's greenhouse gas emissions are balanced by absorption (natural or artificial), resulting in no net addition to atmospheric CO2. India's 2070 net-zero pledge at COP26 anchors its climate policy, requiring sectoral roadmaps and international climate finance mechanisms.