In a decisive push toward industrial decarbonisation, the budget has earmarked ₹20,000 crore over the next five years to expand Carbon Capture, Utilisation and Storage (CCUS) infrastructure across India. The move aims to help Indian industries stay environmentally sustainable while remaining competitive in global export markets. Importantly, it also shields high-emission sectors from potential penalties such as the European Union’s proposed Carbon Border Adjustment Mechanism (CBAM), often referred to as a carbon border tax.
Roadmap Targets Hard-to-Abate Sectors
Building on the CCUS roadmap unveiled in December 2025, the government will accelerate deployment of technologies that achieve higher readiness levels in real-world industrial applications.
The initial rollout will focus on five carbon-intensive sectors:
*Power
*Steel
*Cement
*Refineries
*Chemicals
To kick-start implementation, the government has allocated ₹500 crore for FY 2026–27 under the ministry of power specifically for CCUS deployment.
Balancing Growth with Climate Goals
The strategy aligns closely with India’s commitment to achieve net-zero emissions by 2070. While industries continue to expand to meet growing economic demand, CCUS offers a pathway to reduce emissions without slowing development. In other words, the technology enables companies to cut carbon footprints while sustaining production and exports, striking a balance between climate action and industrial growth.
How CCUS Technology Works
CCUS tackles emissions through two complementary approaches — storage and utilisation.
Storage
First, facilities capture carbon dioxide (CO₂) generated during industrial or energy processes. They then compress, transport, and inject the gas into depleted oil reservoirs or deep geological formations, preventing it from entering the atmosphere.
Utilisation
Alternatively, companies can reuse captured CO₂ as a feedstock for manufacturing. Industries convert the gas into industrial and consumer products, creating value while lowering overall emissions.
Together, these approaches transform CO₂ from a liability into either a safely stored or commercially useful resource.
Boosting Competitiveness in Global Markets
Beyond environmental benefits, CCUS adoption could strengthen India’s export competitiveness. As global markets tighten emission norms, companies with lower carbon footprints will likely gain a pricing and compliance advantage. Consequently, early investment in CCUS infrastructure positions Indian manufacturers to meet international sustainability standards, avoid trade barriers, and attract climate-conscious investors.
A Strategic Step Toward Industrial Decarbonisation
With dedicated funding, sector-specific targets, and a clear policy roadmap, the government is signalling strong intent to mainstream CCUS across heavy industries. As reported by timesofindia.indiatimes.cocm, if implemented effectively, the initiative could become a cornerstone of India’s clean energy transition, enabling the country to decarbonise core industries while safeguarding economic growth.
