Budget Support to Strengthen Carbon Capture Research and Infrastructure

India has earmarked ₹20,000 crore over five years in the Union Budget 2026 to promote Carbon Capture, Utilisation and Storage (CCUS) technologies. The initiative aims to support industrial growth while helping the country meet its climate commitments. The funding comes amid growing concerns over global warming, with the United Nations Environment Programme’s latest Emissions Gap Report warning that limiting temperature rise to 1.5°C above pre-industrial levels is increasingly unlikely.

CCUS technologies capture carbon dioxide (CO₂) emissions from industries such as steel, cement and power generation. The captured carbon can either be stored in suitable underground geological formations or reused to manufacture products, including chemicals. These technologies are particularly important for industries where switching to cleaner energy alone may not be sufficient to reduce emissions.

The proposed roadmap recommends a phased approach to deploying the budget. Around ₹4,000 crore could support research, innovation and pilot projects, including the use of artificial intelligence and machine learning to develop more efficient carbon-capture materials. Demonstration projects and geological studies in regions such as the Cauvery basin, Cambay region and Mahanadi valley could help assess the feasibility of large-scale carbon storage.

Public-Private Partnerships to Enable Commercial Expansion

The second phase proposes allocating approximately ₹9,000 crore to develop infrastructure and encourage public-private partnerships (PPPs). These partnerships could support large-scale carbon-capture facilities serving industrial clusters, including refineries, chemical plants, steel units and cement manufacturers.

Pilot carbon-storage injection projects and direct air capture technologies powered by clean energy could also be tested. The roadmap highlights the importance of developing carbon markets and establishing clear legal rules governing carbon ownership, transportation liabilities, storage responsibilities and emissions accounting.

The final phase recommends allocating ₹6,000–7,000 crore to scale up commercially viable facilities capable of capturing more than one million tonnes of CO₂ annually. Industrial zones would be connected to validated geological storage sites, while carbon capture could also support India’s hydrogen strategy through the development of blue hydrogen as a transitional option.

Successful implementation will require institutional accountability, private investment and timely execution. By combining research, infrastructure development and commercial deployment, India could build a domestic CCUS ecosystem that reduces industrial emissions while supporting economic development. However, achieving these outcomes will depend on cost reductions, reliable storage data, effective regulation and measurable carbon-capture results.