Why Carbon Capture Is Key to India’s Net-Zero Goal

Summary

• The Union Budget has allocated Rs 20,000 crore over five years to develop Carbon Capture, Utilisation and Storage (CCUS) technologies.
• CCUS is essential for hard-to-abate sectors like steel, cement, power, refineries and chemicals, where CO₂ emissions are intrinsic to production.
• India has pilot projects, mapped storage sites, and active research centres (IIT Bombay, JNCASR), but scaling up from lab to industry remains the main challenge.
• Without large-scale CCUS, global and national net-zero targets are practically unachievable.
• The Budget push aims to de-risk and commercialise indigenous CCUS solutions, improving both climate performance and export competitiveness.

What Is CCUS?

• Definition
  • Carbon Capture, Utilisation and Storage (CCUS) refers to a family of technologies that:
    • Capture CO₂ from industrial processes and power plants.
    • Store it safely for long periods (e.g., in deep geological formations).
    • Or utilise it as a raw material to produce useful chemicals and products.
  • It is not a single technology but a suite of methods and processes across the full chain: capture → transport → storage/utilisation.
• Why CO₂ is the focus
  • CO₂ is the main greenhouse gas responsible for global warming and climate change.
  • CCUS aims to prevent this CO₂ from entering the atmosphere in the first place.

Global CCUS Status: A Long Way to Go

• Current deployment
  • About 45 commercial CCUS facilities are operational worldwide.
  • They collectively capture only around 50 million tonnes of CO₂ per year.
  • This is less than 0.5% of the nearly 40 billion tonnes of CO₂ emitted annually.
• Required scale-up
  • To stay on track for a global net-zero scenario by 2050, annual CO₂ capture capacity needs to rise to roughly 435 million tonnes by 2030 and continue growing thereafter.
  • CCUS is now seen as a non-optional component of any realistic pathway to net-zero.
• Key regions leading CCUS
  • Most new projects are emerging in the US, Europe and China.
  • High costs, safety concerns and scale-up challenges have limited wider deployment so far.

Why CCUS Matters Especially for India

• Growing emissions with development
  • India’s emissions are expected to grow in the near and medium term due to rising construction and industrial expansion.
  • India has committed to net-zero emissions by 2070 (announced at the Glasgow climate conference, 2021).
• Hard-to-abate sectors
  • In sectors like steel and cement:
    • CO₂ is released not only from burning fuel but also as an intrinsic part of the production process.
    • Switching to renewable electricity alone cannot eliminate most of these emissions.
  • In fact, in these industries, a major share of CO₂ comes directly from the chemical processes, not from the fuel.
  • CCUS therefore becomes the only viable route to deep decarbonisation for such sectors.
• Economic and trade implications
  • Key Indian export sectors (e.g., steel, cement) face emerging carbon-related tariffs such as the EU’s Carbon Border Adjustment Mechanism (CBAM).
  • Adopting CCUS can:
    • Lower the carbon footprint of Indian products.
    • Improve their competitiveness in low-carbon global markets.

Current Status of CCUS in India

• Pilot and demonstration projects
  • India currently has a few pilot projects in operation.
  • Major players experimenting with CCUS include:
    • Tata Steel
    • Dalmia Cements
    • NTPC (power sector)
    • ONGC (oil and gas)
  • These projects are testing capture, utilisation and storage options in steel, cement and chemicals industries.
• Research and innovation ecosystem
  • Dozens of research groups across Indian institutions are working on CCUS.
  • Dedicated Centres of Excellence include:
    • IIT Bombay – DST-National Centre of Excellence in CCUS.
    • Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR), Bengaluru.
  • Focus areas include:
    • New materials for more efficient CO₂ capture.
    • Improved processes for transport and storage.
    • Innovative ways to convert CO₂ into value-added products.
• Storage potential
  • India has mapped potential large-scale carbon capture and storage sites.
  • Geological formations that can safely store CO₂ over long periods have been identified.

Government Policy Push and R&D Roadmap

• CCUS R&D roadmap (2030)
  • The Department of Science and Technology (DST) released a CCUS R&D roadmap in December.
  • It identifies key technology, finance and policy bottlenecks that hinder rapid development and adoption.
  • Conclusion: while the basic science of CCUS is fairly mature, there is a need for innovation in:
    • Engineering design.
    • Industrial processes.
    • Materials and systems integration.
• Need for innovation along the full CCUS chain
  • To be viable at scale, CCUS needs advances in:
    • Capture – higher efficiency, lower energy use, cheaper sorbents and membranes.
    • Transport – safe and cost-effective CO₂ pipelines, logistics.
    • Storage – robust monitoring, verification and safety protocols.
    • Utilisation – scalable technologies to convert CO₂ into fuels, chemicals, building materials, etc.
  • Each stage must become more efficient, affordable and safe to enable widespread adoption.

Budget 2024–25: Rs 20,000 Crore for CCUS

• Scale and purpose of allocation
  • The Budget earmarks Rs 20,000 crore over five years specifically for CCUS.
  • Primary goal: move technologies from lab-scale to field-scale by achieving higher readiness levels.
  • Funding is aimed at testing, demonstration and scale-up of promising CCUS solutions.
• Bridging the funding gap
  • Many CCUS technologies have already proven their potential in laboratories.
  • The most expensive and risky step is real-world deployment at industrial scale.
  • Private investment has been limited due to high upfront costs and uncertain returns.
  • The Budget allocation is designed to de-risk this phase and attract further private and foreign investment.
• Target sectors for deployment
  • The Finance Minister has indicated a focus on end-use applications in:
    • Power
    • Steel
    • Cement
    • Refineries
    • Chemicals
  • These sectors are among the largest contributors to India’s CO₂ emissions.
• Scale targets and expert views
  • According to experts like Prof. Vikram Vishal (IIT Bombay):
    • To be meaningful and economically viable, CCUS technologies must be scaled to capture and convert or store around 100–500 tonnes of CO₂ per day per installation.
  • With the new funding, there is optimism that several CCUS technologies will be commercially deployed in India within the next five years.

Economic and Industrial Benefits

• Decarbonising hard-to-abate sectors
  • CCUS provides a practical pathway to reduce emissions from industries where process-related CO₂ is unavoidable.
  • For cement and steel in particular:
    • Most CO₂ comes from the production process itself, not just fuel.
    • CCUS is effectively the only technology that can deliver deep emissions cuts while maintaining current production methods.
• Supporting infrastructure growth and climate goals
  • India’s infrastructure needs require continued large-scale production of cement and steel.
  • CCUS allows these industries to grow while still aligning with long-term climate commitments.
  • Industry leaders, like Parth Jindal (Cement Manufacturers’ Association), see this support as critical for enabling CCUS adoption without compromising infrastructure development.
• Trade competitiveness and avoiding carbon penalties
  • Global markets are increasingly penalising high-carbon products through mechanisms such as CBAM.
  • By lowering emissions through CCUS, Indian producers can:
    • Reduce exposure to carbon border taxes.
    • Access premium low-carbon market segments.
    • Strengthen their position as reliable suppliers in a decarbonising world economy.

Key Takeaways

• CCUS is indispensable for achieving net-zero, especially in heavy industry.
• Global deployment is still tiny compared to what is needed, but momentum is building.
• India has a growing CCUS ecosystem of pilots, mapped storage sites and strong research centres.
• The Budget’s Rs 20,000 crore allocation aims to bridge the crucial gap between lab research and commercial-scale deployment.
• For India, CCUS is not just a climate tool; it is also a strategic economic and trade instrument for future competitiveness.