Carbon Capture in India: Bridging Climate Ambition with Industrial Reality

Why in News ?

The Union Budget has announced an allocation of ₹20,000 crore over five years for Carbon Capture, Utilisation and Storage (CCUS), signalling a major policy push to cut emissions from hard-to-abate sectors. By backing CCUS technologies, the government aims to reduce industrial carbon footprints and support India’s long-term goal of achieving net-zero emissions by 2070.

Background and Context

• India is the world’s third-largest emitter of greenhouse gases, driven primarily by:
  • Rapid industrialisation,
  • Infrastructure expansion,
  • Rising energy demand.
• While India has committed to:
  • Reducing emissions intensity of GDP,
  • Expanding renewable energy capacity,
  • Achieving net-zero by 2070,
• Certain sectors such as steel, cement, power, refineries and chemicals remain:
  • Structurally dependent on carbon-intensive processes,
  • Difficult to decarbonise through renewable energy alone.
• In this context, CCUS has emerged as:
  • A critical “bridging technology”,
  • A necessary complement to renewables, energy efficiency and green hydrogen,
  • A key enabler for meeting long-term climate commitments without derailing industrial growth.

About Carbon Capture, Utilisation and Storage (CCUS) Solutions

1. Capturing Carbon Emissions

• CCUS refers to a set of technologies that:
  • Capture carbon dioxide (CO₂) released during industrial activities,
  • Prevent its release into the atmosphere.
• CO₂ is the primary driver of:
  • Global warming,
  • Climate change.

2. Storage or Reuse of Captured CO₂

• Once captured, CO₂ can be:
  • Stored underground in geological formations for long-term isolation, or
• Utilised by converting it into:
  • Chemicals,
  • Fuels,
  • Construction materials,
  • Carbonated products.

3. Not a Single Technology

• CCUS is not one technology but a suite of methods, covering:
  • Capture,
  • Transport,
  • Storage,
  • Utilisation.
• Different industries use different combinations depending on:
  • Process type,
  • Emission concentration,
  • Location and infrastructure.

4. Limited Deployment So Far

• Although CCUS technologies have existed for decades:
  • Deployment has been limited due to:
    • High costs,
    • Safety and liability concerns,
    • Scaling challenges,
    • Lack of supportive policy frameworks.
• Adoption has accelerated only in recent years.

5. Global Status of CCUS

• Most active CCUS projects are currently in:
  • The United States,
  • Europe,
  • China.
• Even so:
  • Only about 50 million tonnes of CO₂ are captured annually,
  • Less than 0.5% of global emissions.

6. Crucial for Net-Zero Goals

• With global emissions remaining high:
  • There is no credible pathway to achieving net-zero by 2050 or limiting global warming without large-scale CCUS deployment.
• CCUS is increasingly seen as:
  • An essential pillar of climate mitigation,
  • Especially for industrial sectors with process emissions.

Budget Push for Carbon Capture in India

India’s CCUS Journey So Far

• Since announcing its net-zero goal at the 2021 Glasgow Climate Summit, India has:
  • Accelerated development of indigenous CCUS technologies tailored to domestic conditions.
• Current initiatives include:
  • Pilot and demonstration projects in steel, cement and chemical sectors.
  • Mapping of potential large-scale capture and storage sites.
• Establishment of Centres of Excellence, such as:
  • IIT Bombay,
  • JNCASR Bengaluru,
  • Driving advanced research and innovation.

Policy and R&D Roadmap

• In December, the Department of Science and Technology released a CCUS R&D Roadmap for 2030, identifying:
  • Key technological bottlenecks,
  • Financial constraints,
  • Policy and regulatory gaps slowing adoption.

Role of the ₹20,000 Crore Budget Outlay

• The five-year allocation aims to:
  • Bridge the critical funding gap for field testing and scale-up.
• Many CCUS solutions:
  • Have demonstrated laboratory success,
  • But require real-world deployment to reach commercial readiness.
• The funding seeks to:
  • Raise technology readiness levels,
  • Enable systems to capture or store 100–500 tonnes of CO₂ per day.
• Experts expect:
  • Several CCUS technologies to reach commercial deployment in India within five years.

Economic and Strategic Benefits of CCUS

1. Decarbonising Hard-to-Abate Industries

• CCUS is crucial for sectors like:
  • Steel,
  • Cement,
  • Refineries,
  • Chemicals,
• Where emissions arise not only from fuel use but are:
  • An inherent part of chemical and industrial processes.
  • Switching to renewable power alone cannot eliminate these emissions.

2. Only Viable Decarbonisation Route for Certain Sectors

• In cement and steel:
  • Most CO₂ emissions come from chemical reactions, not energy consumption.
• CCUS is therefore:
  • The only practical solution to significantly reduce their carbon footprint.

3. Budget Focus on Major Emitters

• The ₹20,000 crore allocation is targeted at:
  • Power,
  • Steel,
  • Cement,
  • Refineries,
  • Chemicals,
• Together accounting for the bulk of India’s CO₂ emissions.

4. Boosting Export Competitiveness

• Indian exporters face:
  • Carbon-related trade barriers such as the EU’s Carbon Border Adjustment Mechanism (CBAM).
• CCUS adoption can:
  • Lower embedded emissions,
  • Improve compliance with international climate standards,
  • Enhance the competitiveness of Indian products in global markets.

Challenges and Constraints

• High costs of capture, transport and storage infrastructure.
• Energy penalty, as CCUS systems consume significant power.
• Safety and liability concerns related to long-term CO₂ storage.
• Lack of regulatory frameworks governing carbon storage, monitoring, and liability.
• Public acceptance issues, particularly around underground storage sites.

Way Forward

• Develop a comprehensive regulatory framework for CO₂ transport, storage, monitoring and liability.
• Promote public-private partnerships to accelerate large-scale deployment.
• Integrate CCUS with:
  • Renewable energy,
  • Green hydrogen,
  • Industrial electrification strategies.
• Invest in:
  • Indigenous R&D,
  • Skilled manpower,
  • Infrastructure such as CO₂ pipelines and storage hubs.
• Align CCUS deployment with:
  • India’s climate targets,
  • Industrial policy,
  • Trade competitiveness strategies.

Significance

• Climate Commitment Fulfilment:
  • Enables India to meet net-zero goals without sacrificing industrial growth.
• Industrial Sustainability:
  • Provides a realistic decarbonisation pathway for hard-to-abate sectors.
• Economic Resilience:
  • Protects exports from carbon tariffs and trade barriers.
• Technological Leadership:
  • Positions India as a global innovator in affordable and scalable CCUS solutions.
• Balanced Transition:
  • Supports a just and gradual transition to a low-carbon economy.