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

Summary

• The Union Budget has allocated Rs 20,000 crore over five years for Carbon Capture, Utilisation and Storage (CCUS).
• CCUS helps capture CO₂ from hard-to-abate sectors like steel, cement, power, refineries and chemicals.
• These technologies are essential for India’s 2070 net-zero goal and for staying competitive amid global carbon tariffs.
• India already has pilot projects, mapped storage sites, and active research centres, but large-scale deployment is still limited.

What Is CCUS?

• Carbon Capture, Utilisation and Storage (CCUS) is a set of technologies that:
  • Capture CO₂ from industrial and power plants.
  • Utilise the CO₂ by converting it into useful products (chemicals, fuels, building materials, etc.).
  • Store CO₂ safely for long periods, usually in deep geological formations underground.
• CCUS is not a single technology but a collection of methods and processes spanning capture, transport, utilisation and storage.
• Its core aim is to prevent CO₂ from entering the atmosphere, thereby limiting global warming.

Global Status of CCUS

• Commercial CCUS facilities are already operational in regions such as the US, Europe and China.
• Current global CCUS performance:
  • About 50 million tonnes of CO₂ are captured per year worldwide.
  • Global annual CO₂ emissions are nearly 40 billion tonnes.
  • So, less than 0.5% of total emissions are currently captured.
• To meet a global net-zero by 2050 scenario, captured CO₂ volumes must rise sharply by 2030 and beyond.
• Most analyses find no realistic net-zero pathway without a major scale-up of CCUS.

Why CCUS Matters for India

• India’s emissions are expected to grow in the near and medium term due to:
  • Rapid construction and infrastructure expansion.
  • Industrial growth in sectors like steel, cement and chemicals.
• India has pledged to achieve net-zero emissions by 2070 (announced at COP26 in Glasgow, 2021).
• For several key industries, CO₂ is intrinsic to the production process, not just a by-product of burning fuel.
  • Cement: CO₂ is released when limestone is converted to clinker.
  • Steel: CO₂ is emitted in reduction and processing stages.
• In these sectors, switching to renewable electricity alone cannot eliminate emissions because process-related CO₂ remains.
• CCUS is therefore critical for decarbonising hard-to-abate industries while still meeting India’s infrastructure and development needs.

Current Status of CCUS in India

Pilot Projects and Industry Efforts

• India has moved beyond pure research into pilot and demonstration projects in:
  • Steel
  • Cement
  • Chemicals
  • Power and related sectors
• Key companies experimenting with CCUS include:
  • Tata Steel
  • Dalmia Cements
  • NTPC (power)
  • ONGC (oil and gas)

Research Ecosystem

• Dozens of research groups across Indian institutions are working on CCUS.
• Dedicated Centres of Excellence have been created, including:
  • DST–National Centre of Excellence in CCUS at IIT Bombay.
  • Centres at Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR), Bengaluru.
• Work focuses on:
  • Improved capture materials and solvents.
  • Efficient transport and storage solutions.
  • Innovative utilisation pathways to create value from CO₂.

Storage Potential and Planning

• Potential large-scale storage sites have been mapped across India.
• Geological formations suitable for long-term storage (such as deep saline aquifers and depleted reservoirs) have been identified as candidates.

Budget Push: Rs 20,000 Crore for CCUS

What the Budget Provides

• The Union Budget has earmarked Rs 20,000 crore over five years for CCUS development.
• This funding aims to bridge the gap between lab-scale success and real-world deployment.
• Focus areas include:
  • Field testing of promising technologies.
  • Scaling up from pilot to commercial levels.
  • Improving cost-effectiveness and safety across the CCUS chain.

From Lab to Field: The Scale-Up Challenge

• Many CCUS solutions are already proven in laboratories but not yet deployed at scale.
• To be economically viable and impactful, technologies must:
  • Capture and convert or store in the range of 100–500 tonnes of CO₂ per day, as highlighted by experts like Prof. Vikram Vishal of IIT Bombay.
  • Operate reliably under industrial conditions.
  • Integrate smoothly with existing plants and infrastructure.
• Such scaling requires substantial capital and comes with uncertainty, which has previously discouraged private investment.
• The new budget allocation is designed to de-risk and accelerate this transition to higher technology readiness levels.

Policy and R&D Roadmap

• In December, the Department of Science and Technology (DST) released a CCUS R&D Roadmap for 2030.
• The roadmap identifies key bottlenecks in:
  • Technology: Need for better materials, capture processes, and monitoring tools.
  • Finance: High upfront costs and uncertain returns.
  • Policy: Regulatory frameworks, standards and incentives.
• The budgetary support aligns with this roadmap to push technologies toward commercial deployment within the next five years.

Economic and Strategic Benefits of CCUS

Decarbonising Hard-to-Abate Sectors

• CCUS is especially important for sectors where emissions are process-related:
  • Cement
  • Steel
  • Power
  • Refineries
  • Chemicals
• These sectors are also major contributors to India’s CO₂ emissions.
• For them, CCUS is often the only realistic pathway to deep decarbonisation while maintaining output.

Staying Competitive Amid Global Carbon Tariffs

• Indian exporters, particularly in steel and cement, face emerging trade measures such as the EU’s Carbon Border Adjustment Mechanism (CBAM).
• CBAM and similar policies impose carbon-related tariffs on imports with high embedded emissions.
• By adopting CCUS and lowering their carbon footprint, Indian industries can:
  • Reduce exposure to such tariffs.
  • Protect and expand market access in key destinations like the European Union.
  • Position themselves as low-carbon suppliers in global value chains.

Support for the Cement Sector and Infrastructure Growth

• The cement industry views CCUS support as critical.
  • Parth Jindal, President of the Cement Manufacturers’ Association, notes that the budget intervention directly addresses technology and cost barriers for CCUS in cement.
  • This allows the sector to decarbonise while still meeting India’s long-term infrastructure needs.

Key Takeaways

• CCUS is indispensable for India’s net-zero 2070 target, especially for industries where process emissions cannot be eliminated by renewables alone.
• The Rs 20,000 crore budget allocation is a major step to move technologies from labs and pilots to commercial scale.
• India already has a growing CCUS ecosystem: pilot projects, mapped storage sites, and strong research institutions.
• Scaling CCUS will not only cut emissions but also shield Indian exports from carbon tariffs and keep them competitive globally.
• Over the next five years, multiple CCUS technologies are expected to reach commercial deployment in India, potentially transforming the carbon footprint of key sectors.