India’s Rs 20,000-crore CCUS push: What the Union Budget’s carbon capture bet really means

India's recent Union Budget announcement of a Rs 20,000 crore allocation for Carbon Capture, Utilisation, and Storage (CCUS) technology marks a pivotal moment in the nation's climate change mitigation strategy. This significant financial commitment, termed a 'carbon capture bet', underscores India's dual challenge of meeting its burgeoning energy demands while simultaneously addressing its ambitious climate goals, including the Net Zero by 2070 target. The move, however, has ignited a crucial debate regarding the economic viability, scalability, and ultimate climate efficacy of CCUS when juxtaposed against the rapid advancements and cost-effectiveness of renewable energy sources. Historically, India's energy landscape has been heavily reliant on fossil fuels, particularly coal, which powers a substantial portion of its electricity generation and industrial sectors. This dependence, while fuelling economic growth, has also positioned India as the world's third-largest emitter of greenhouse gases. Recognizing this, India ratified the Paris Agreement in 2016 and submitted its Nationally Determined Contributions (NDCs), committing to reduce the emissions intensity of its GDP by 45% by 2030 from 2005 levels and achieve about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. While renewables like solar and wind are central to this transition, the hard-to-abate sectors such as steel, cement, and petrochemicals, which have intrinsic process emissions, present a unique challenge. This is where CCUS enters the picture, offering a potential pathway to decarbonize these critical industrial operations without entirely overhauling their existing infrastructure. The Union Budget's allocation is a clear signal that the Indian government views CCUS as a necessary component of its diversified climate action portfolio. CCUS involves capturing carbon dioxide (CO2) emissions from large point sources, such as power plants and industrial facilities, transporting it, and then either storing it deep underground in geological formations (CCS) or utilizing it to create products (CCU). While the technology has been in development for decades globally, its deployment at scale remains limited, primarily due to high capital and operational costs, and the technical complexities involved. The 'carbon capture bet' acknowledges these hurdles but also expresses confidence in India's ability to innovate and scale solutions. Several key stakeholders are involved in this ambitious push. The **Government of India**, through ministries such as the Ministry of Finance, Ministry of Environment, Forest and Climate Change, Ministry of Power, and Ministry of Coal, is the primary driver, formulating policy and allocating resources. **Public Sector Undertakings (PSUs)** like NTPC, ONGC, and Coal India, which operate large fossil fuel-based assets, are crucial for piloting and implementing CCUS projects. **Private industries** in sectors like cement, steel, and chemicals are also vital, as they are the primary sources of industrial emissions that CCUS aims to abate. **Research and academic institutions** play a critical role in developing indigenous, cost-effective CCUS technologies. Finally, **environmental advocacy groups** and international bodies like the UNFCCC and IPCC serve as watchdogs, ensuring that CCUS is pursued responsibly and does not detract from the broader imperative of transitioning to a fully renewable energy system. For India, this initiative carries profound significance. Economically, it could foster a new industry, create skilled jobs, and attract foreign investment in green technologies. Politically, it strengthens India's commitment to global climate action, positioning it as a responsible developing nation that balances economic growth with environmental stewardship. Socially, if successful, it could help maintain jobs in traditional industrial sectors during the energy transition, preventing abrupt disruptions. However, the high costs associated with CCUS could strain public finances and potentially divert investments from more proven and cost-effective renewable energy solutions. The debate centers on whether CCUS represents a genuine long-term solution or merely a way to extend the lifespan of fossil fuel-based industries. Constitutionally, India's commitment to environmental protection is enshrined in **Article 48A** of the Directive Principles of State Policy, which mandates the state to 'endeavour to protect and improve the environment and to safeguard the forests and wild life of the country'. Furthermore, **Article 51A(g)** lists it as a fundamental duty of every citizen to 'protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures'. The Environment (Protection) Act, 1986, provides the legislative framework for environmental conservation. India's CCUS policy aligns with these constitutional directives by seeking to mitigate environmental pollution. The NITI Aayog has also played a crucial role, releasing a report on 'Carbon Capture, Utilization, and Storage Policy Framework and its Deployment Mechanism for India' in 2022, providing a roadmap for the technology's integration. The future implications of this CCUS push are multifaceted. If successful, it could offer a viable path to decarbonize hard-to-abate sectors, helping India meet its Net Zero target without completely sacrificing its industrial base. It could also lead to technological breakthroughs that make CCUS more affordable and scalable globally. Conversely, if the technology proves too expensive or ineffective, it risks becoming a costly distraction, delaying the inevitable and more comprehensive shift towards renewable energy. The challenge for India will be to strike a delicate balance, leveraging CCUS where it offers genuine climate benefits while aggressively accelerating its renewable energy transition to achieve sustainable development.