India is set to launch a ₹38,900 crore carbon capture, utilisation and storage (CCUS) programme, with the government contributing around ₹19,500 crore and the remainder expected from banks and multilateral agencies. The six-year, phased initiative will support R&D, semi-commercial, and lab-scale projects across established industries such as steel, cement, iron, chemicals, and emerging sectors like coal gasification and green hydrogen. With coal power capacity projected to reach 97 GW by 2032, CCUS is crucial for reducing industrial emissions, supporting geological sequestration, and helping India achieve its targets of halving emissions by 2050 and reaching net zero by 2070.
The Centre is formulating a carbon capture, utilisation and storage (CCUS) programme with an estimated investment of ₹38,900 crore, according to people familiar with the plan. The government is expected to contribute a little over half of this, amounting to around ₹19,500 crore, while the remainder could be financed through bank lending and support from multilateral agencies.
The initiative will include several sub-schemes with varying levels of government support. Research and development projects may receive 100% government funding, while others could be backed in the range of 40–50%. The ‘Semi-commercial’ projects may receive full government funding, while ‘lab-scale’ projects are expected to be supported with only a partial share of their total cost, the sources said.
CCUS technology is designed to capture carbon dioxide emissions from large industrial and energy-intensive sources such as power plants, cement, and steel production.
The proposed programme will be implemented in phases, with the first phase expected to run for six years. It aims to support both established sectors like iron, chemicals, and petrochemicals, as well as emerging ‘sunrise’ industries such as coal gasification and green hydrogen. Though CCUS is currently viewed as an expensive technology, industry experts believe that costs could decline significantly once adoption scales up.
Balancing coal dependence with climate goals
Coal-based power plants are expected to remain a cornerstone of India’s energy sector, with 97 GW of additional capacity planned by 2032, making the adoption of this technology vital. India has also pledged to reduce emissions by half by 2050 and achieve net-zero status by 2070.
A key element of the strategy may involve geological sequestration—permanently storing carbon dioxide in underground formations. Geological sequestration is considered one of the most efficient and cost-effective methods for storing CO₂. In this process, high-purity CO₂ is transported via pipelines and injected into sealed underground geological formations, where it occupies the pore spaces within rocks. The rock layers must have sufficient porosity to accommodate CO₂ dispersion, while impermeable layers ensure the gas remains securely trapped, allowing permanent storage. Common techniques include depleted oil and gas field storage, deep saline reservoirs, coal seam sequestration, and mineralization-based storage.
Experts stress that the sheer volume of emission reduction needed cannot be addressed solely through utilisation technologies, making sequestration an indispensable component of the CCUS chain.
Industries can identify clusters linking major emission sources with storage or utilisation options; conduct pre-feasibility studies covering capex, opex, capture efficiency, and logistics; establish SPVs or joint ventures to aggregate volumes; and engage lenders early to align on covenants, loan tenors, and tariff structures.
India’s move coincides with the growing adoption of CCUS technologies worldwide. While the US has been the leading market, countries including Australia, Brazil, Canada, China, Norway, Saudi Arabia, and the UAE have also advanced adoption. Reports earlier this year indicated that India was considering a major CCUS rollout, and the current plan marks a significant step toward that goal.
Recent developments
India has recently undertaken several significant initiatives to advance carbon capture, utilisation, and storage (CCUS) technologies, reflecting its growing focus on industrial decarbonisation and long-term climate goals. These include:
CCU Testbeds in Cement Sector: As part of industrial decarbonisation efforts, the government has approved the setting up of five carbon capture and utilisation (CCU) testbeds within the cement industry. Launched by the Ministry of Science & Technology, the initiative aims to develop integrated CO₂ capture and utilisation units in industrial setups, leveraging an innovative public-private partnership (PPP) funding model. These will showcase scalable pathways for achieving net-zero emissions.
First CO₂ Storage Well in Basalt Formations: IISER Bhopal, in collaboration with CSIR-NGRI and supported by the Department of Science & Technology under the DeCarbFaroe programme, has drilled India’s first CO₂ injection well. It explores mineral-based carbon storage in basaltic geological formations, offering a potential route for secure, long-term sequestration. The collaboration spans nine countries across Europe and Asia, fostering the exchange of scientific knowledge and driving sustainable energy transitions, with India playing a pivotal role in expanding these efforts.
Pan-Asian CCUS Feasibility Study by Steel Consortium: A global consortium including BHP, JSW Steel, ArcelorMittal Nippon Steel India, and others has launched a one-year pre-feasibility study to assess CCUS hub development in the steel sector across Asia. The study will explore shared infrastructure models to reduce costs and aggregate capture volumes. Findings will be made public by the end of 2026.
Conclusion
India’s ambitious CCUS programme represents a major stride toward industrial decarbonisation and achieving climate targets. Through a combination of government funding and private sector participation, it seeks to make carbon capture, utilisation, and storage scalable and cost-efficient. Initiatives like geological sequestration, industrial clustering, and shared infrastructure will support effective implementation, enabling India to lower emissions, achieve net-zero by 2070, and reinforce its position in the global CCUS landscape.
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Carbon Capture, Utilisation and Storage (CCUS)
India launches first cluster of CCU testbeds
FAQ
Q1. What is the estimated cost of India’s CCUS programme?
₹38,900 crore.
Q2. How much will the government contribute?
Around ₹19,500 crore, a little over half of the total outlay.
Q3. How will the remaining funds be raised?
Through bank loans and multilateral agency support.
Q4.Which projects may receive 100% government funding?
R&D and semi-commercial projects.
Q5. What is the duration of the first phase?
Six years.
