Indian government to invest US$2.2bn in CCUS over five years
THE INDIAN government’s latest federal budget has committed US$2.2bn (Rs 20,000 crore) to scale up carbon capture, utilisation and storage (CCUS) projects over the next five years.
Delivering her budget speech earlier this month, finance minister Nirmala Sitharaman said the funding will help achieve greater use of CCUS technology “at scale” across the power, steel, cement, refining and chemicals sectors.
The package includes US$55m in revenue spending for 2026–27 and represents a new stream of government investment not included in the previous two budgets. The government stressed that the aim of the scheme is to move India towards greater end-use application of CCUS across the five energy-intensive sectors.
India is the third highest greenhouse gas emitter in the world and is targeting net-zero emissions by 2070. The CCUS funding push follows the country’s “R&D roadmap” published in December.
India’s heavy reliance on coal may make large-scale CCUS deployment more challenging than in gas-dependent economies, due to the more complex impurities in coal-derived streams. Storage is also a barrier to widespread CCUS. A 2021 report from India’s Ministry of Petroleum and Natural Gas identified 26 potential storage sites, mostly in offshore saline aquifers. The ministry also identified several sites, both on- and offshore, where CO2 storage could be used for enhanced oil recovery, along with a large site in the country’s northeast where coalbed methane recovery could be pursued.
Beyond CCUS, the US$590bn budget also boosts heavy industry and biofuels. Investment in speciality steel manufacturing will almost double to US$419m in 2026–27, accounting for most of the Ministry of Steel’s US$489m budget and aimed at increasing domestic production.
Meanwhile, bioethanol production also received a boost, with funding to support lignocellulosic biomass-to-ethanol projects increasing from US$42m in last year’s budget to US$217m in 2026–27.
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