India’s Net Zero by 2070 commitment sits atop a harder, less visible problem: how does an economy still building its industrial base decarbonise sectors where emissions are not a fuel choice, but a chemical outcome? This is the question India’s industrial sector must now answer, and Carbon Capture, Utilisation and Storage (CCUS) is emerging as one of the few tools capable of addressing it.
In cement, steel, refining and chemicals, carbon dioxide is often generated by the process itself, not merely by the energy used to run it. Calcination in a cement kiln, reduction reactions in a blast furnace, and reforming reactions in an ammonia plant all release CO2 regardless of whether the plant runs on coal or renewable power. This is precisely why solar and wind capacity, however impressive, cannot fully solve industrial decarbonisation on their own. Renewables clean the grid. They do not touch process emissions.
The Rs 20,000 Crore Signal
This structural reality is now being reflected in policy. The Union Budget 2026-27 allocated Rs 20,000 crore over five years toward CCUS, targeting five hard-to-abate sectors including power, steel, cement, refineries and chemicals. The finance minister termed this an attempt to bridge the gap between pilot projects and large-scale systems, aligning it with India’s Net Zero 2070 strategy. This is a meaningful shift: CCUS is no longer an experimental add-on but infrastructure, comparable to power transmission or gas pipelines.
The budget did not arrive in isolation. It builds on the R&D Roadmap to Enable India’s Net Zero Targets through CCUS, released by the Department of Science and Technology in December 2025, which combines translational research to move technologies from lab to industrial scale with disruptive research to improve CCUS efficiency and economics. Policy continuity between research funding and commercial deployment is rare in India’s climate story; its presence here signals a more deliberate, engineering-led approach.
Transforming funding announcements into practical execution is the real test ahead. Industry voices have flagged that funding must flow toward shared CO2 transport and storage infrastructure, early-mover risk support, and commercial-scale demonstration projects, since building this infrastructure on an individual-plant basis is economically unworkable for most Indian units operating on thin margins.
Regulatory clarity is equally critical. Clear frameworks covering measurement and verification, third-party access to transport networks, and long-term storage liability will be essential to attract private capital. This is where India’s institutions, not its engineers, face the sharper test. Carbon Capture technology exists and is improving. What is missing is the legal and commercial scaffolding that lets a cement plant trust that its captured CO2 will be transported, stored, and accounted for reliably over decades.
Storage Potential, and Its Limits
On the geological side, early signs are encouraging. Recent research puts India’s theoretical CO2 storage potential at 400 to 600 gigatonnes, spread across saline aquifers, basalt formations, depleted oil and gas reservoirs, and coalbed methane. That optimism needs tempering, though. Theoretical potential is not validated capacity, and these estimates require site-specific field testing before they can support commercial-scale projects. India’s current pilot activity also remains modest by global standards, running at single-digit or low double-digit tonnes-per-day scale, while global leaders operate at much larger scales.
This is not a reason for pessimism but for sequencing. Early demonstration projects, such as the Integrated CCUS Field Laboratory launched in 2026, exist precisely to close that validation gap before capital is committed at scale.
A Complementary Tool But Not A Substitute
CCUS should not be mistaken for a silver bullet. Globally, and increasingly in Indian policy discourse, it is framed as a targeted, supplementary intervention, one that is necessary for specific hard-to-abate sectors but effective only when paired with continued renewable energy expansion and genuine climate safeguards. Treating it as a substitute for decarbonising the grid would misallocate both capital and expectations.
Storage is not the only pathway either. Utilisation routes, including mineralisation into building materials and chemical conversion into products such as urea or methanol, are gaining ground alongside biological conversion, in which algae or bacteria consume CO2 to produce biomass, biofuels, or animal feed. Algae-based carbon capture is drawing particular interest in India, where early-stage platforms are being designed to consume industrial flue gas and convert it into usable biochemicals, offering a lower-cost alternative to conventional capture chemistry. For clusters without easy access to saline aquifers or depleted reservoirs, such systems offer a more localised route to managing emissions.
Indian industry also cannot ignore the competitiveness dimension. As carbon border mechanisms gain traction internationally, embedded emissions are beginning to shape market access and pricing power for exporters. Indian industrial champions increasingly see CCUS not only as an emissions tool, but as a strategic hedge protecting their place in global supply chains.
India’s industrial decarbonisation story is entering a more demanding phase, one where budget allocations must translate into transport networks, storage hubs, verification systems and bankable projects. This translation in the coming two to three years will determine whether CCUS becomes genuine national infrastructure or remains a collection of well-funded pilots. The technology and capital appear to be aligning; what remains is the harder work of building shared systems that let industrial units actually use them.
