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

Indian Express - Explained · 16 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

CCUS allocation: The ₹20,000 crore budget outlay aims to scale up indigenous CCUS technologies from pilot stages to commercial deployment, addressing India's specific industrial needs.

Net-zero pathway: CCUS is essential for India's 2070 net-zero goal as emissions from core industries (steel, cement, chemicals) are projected to grow with economic expansion.

Industrial relevance: In sectors like cement and steel, CO2 emissions are intrinsic to production processes, making CCUS the only viable decarbonization solution beyond fuel switching.

Export competitiveness: The budget targets industries facing EU's Carbon Border Adjustment Mechanism (CBAM), where CCUS adoption can prevent loss of market share due to carbon tariffs.

Research infrastructure: Centres of Excellence at IIT Bombay and JNCASR Bengaluru are developing homegrown solutions, with DST releasing a CCUS R&D roadmap for 2030.

[GS3-Environment] The CCUS push aligns with India's updated NDC targets under the Paris Agreement, particularly for industrial decarbonization beyond renewable energy expansion.

Implementation challenges: Current global CCUS capacity captures <0.5% of annual CO2 emissions, with cost, scalability, and geological storage feasibility being key constraints.

Way Forward: India should establish a CCUS mission with clear technology transfer protocols, create carbon credit markets for CCUS adoption, and develop regulatory frameworks for safe CO2 storage in identified geological sites.

Key terms

Carbon Capture, Utilisation and Storage (CCUS)

A suite of technologies that capture CO2 emissions from industrial processes, either storing it underground or converting it into useful products. For UPSC, CCUS is critical for India's net-zero strategy as it addresses emissions from hard-to-abate sectors excluded from renewable energy solutions, with implications for climate policy and industrial competitiveness.

Net-zero by 2070

India's commitment at COP26 to balance greenhouse gas emissions with removal by 2070. Strategically significant as it allows developmental space while aligning with climate justice principles, requiring sectoral roadmaps like CCUS for industry and carbon sinks for agriculture.

Carbon Border Adjustment Mechanism (CBAM)

The EU's policy imposing tariffs on imports based on embedded carbon, operational from 2026. Relevant for UPSC as it impacts India's steel, cement, and aluminum exports, necessitating domestic carbon pricing or mitigation technologies like CCUS to maintain trade competitiveness.

DST-National Centre of Excellence in CCUS

A research hub at IIT Bombay established under the Department of Science & Technology to develop indigenous CCUS technologies. Institutionally important for UPSC as it represents India's push for localized climate solutions, combining academic research with industrial applications under the Science, Technology, and Innovation Policy 2020.