₹20,000 Crore CCUS Push to Cut Industrial Emissions

The government has proposed a major public investment to accelerate carbon capture utilisation and storage technologies as part of its climate and industrial strategy. In the Union Budget 2026, Union Finance Minister Nirmala Sitharaman announced an outlay of ₹20,000 crore over the next five years to curb emissions from hard-to-abate sectors such as power generation, steel, cement, refineries and chemicals.

CCUS Outlay and Sectoral Coverage

Presenting the Budget in the Lok Sabha, Sitharaman said the proposed funding aligns with the national CCUS roadmap launched in December 2025. The investment is intended to support deployment of CCUS technologies at scale and raise their readiness levels across five key industrial sectors. These sectors account for a significant share of India’s industrial emissions and have limited alternatives for deep decarbonisation through electrification alone.

Role in Industrial Decarbonisation

Industry experts have welcomed the announcement, noting that CCUS is critical for reducing emissions from energy-intensive processes. Industrial activity contributes an estimated 30–35 per cent of India’s total carbon emissions, making it a central focus area for climate mitigation. CCUS is also expected to enable production of blue hydrogen, particularly for sectors such as steel and cement, where hydrogen can partially replace fossil fuels without compromising process stability.

India’s Carbon Storage Potential

Preliminary assessments indicate that India has around 600 billion tonnes of geological carbon dioxide storage potential. These include depleted oil and gas fields, deep saline aquifers and unmineable coal seams. Policymakers view this natural advantage as a strategic asset that can support long-term emissions reduction while allowing continued industrial growth. Early policy work on CCUS has already been undertaken, including collaboration between industry and NITI Aayog to develop India’s first CCUS policy framework.

Important Facts for Exams

• CCUS stands for carbon capture utilisation and storage.
• Hard-to-abate sectors include steel, cement, power and refineries.
• India’s estimated CO₂ storage potential is about 600 billion tonnes.
• CCUS supports blue hydrogen production.

Climate Strategy and Long-Term Impact

The proposed ₹20,000 crore investment positions CCUS as a core pillar of India’s decarbonisation strategy, complementing renewable energy expansion and energy efficiency measures. By focusing on large industrial emitters, the government aims to balance climate commitments with economic growth and industrial competitiveness. The success of the programme will depend on technology deployment, regulatory clarity and effective public–private collaboration over the next five years.