CCUS in India: Why it Matters in India’s Decarbonisation Journey

A structured policy response is essential to unlock CCUS at scale. Lifecycle carbon assessments should be undertaken to ensure that supported CCUS pathways deliver genuine net emission reductions.

March 12, 2026. By News Bureau

Tags:

articles

Lifecycle Assessments

India’s commitment to achieve net-zero emissions by 2070 and to reduce the emission intensity of its GDP by 45 percent from 2005 levels by 2030 marks a significant step in its climate journey. Considerable progress has already been made—most notably, India reached 50 percent non-fossil fuel capacity in its electricity mix five years ahead of its Paris Agreement target.

Yet the road to net-zero presents challenges that renewable energy alone cannot address. Grid stability concerns mean that coal-based power generation will continue to play a role in the foreseeable future. At the same time, industrial sectors such as steel and cement—critical to India’s economic growth—are inherently emission-intensive. Steel production depends on coking coal, while cement manufacturing releases CO₂ as part of the limestone calcination process. As infrastructure demand rises, emissions from these sectors are likely to grow.

These realities point to a clear conclusion: India must go beyond emission reduction and actively pursue solutions that can capture and manage unavoidable carbon emissions. Carbon Capture, Utilisation and Storage (CCUS) therefore emerge as a critical component of India’s long-term decarbonisation strategy. In acknowledgement of the need for CCUS, the Union Budget 2026-2027 proposes to scale CCUS technologies to achieve higher levels of readiness in end use applications across five industrial sectors, for the facilitation of which, an outlay of INR 20,000 crore has been proposed over the next 5 years.

What is CCUS and How Does it Work?

CCUS refers to a group of technologies that capture CO₂ from industrial sources or directly from atmosphere and then either utilise it or store it permanently. The process typically unfolds across four stages.

First, CO₂ is captured from sources such as coal-fired power plants, refineries, etc.. Second, where feasible, the captured CO₂ is used on-site as an input in industrial processes. If on-site use is not possible, CO₂ is transported—most commonly through pipelines—to another location where it is is either utilised off-site or injected into suitable geological formations for long-term storage.

The effectiveness of CCUS depends not just on capture, but on utilisation or storage solutions.

Utilisation Pathways Relevant to India

The most established use of captured CO₂ is Enhanced Oil Recovery (EOR), where CO₂ is injected into oil reservoirs to improve oil mobility and increase extraction. In India, CO₂-based EOR is viewed as a promising entry point for CCUS deployment due to the maturity of the technology and the economic benefit of increased hydrocarbon recovery, which can partially offset CCUS costs.

Captured CO₂ can also be used for enhanced coal bed methane recovery, where CO₂ injection displaces methane trapped in coal seams, enabling additional gas production.

Beyond the energy sector, construction materials offer a significant utilisation opportunity. India’s construction sector is expected to grow at a CAGR of 6–12 percent between 2025 and 2030. CO₂ can be injected during concrete curing, where it forms stable carbonates. This improves compressive strength and allows a reduction in cement content by 5–8 percent, lowering both production costs and emissions.

CO₂ can also be used to treat alkaline industrial waste generated by steel, cement, alumina, and coal-based power plants. Through accelerated carbonation, CO₂ reacts with alkaline leachates to form stable mineral carbonates. This process mitigates environmental risks, reduces disposal costs, and enables the reuse of treated material as construction aggregates.

Why Storage Remains Indispensable

While utilisation plays an important role, it cannot replace CO₂ storage. Many utilisation pathways—such as urea production, etc.—ultimately release CO₂ back into the atmosphere, limiting their impact.

In contrast, CO₂ used in EOR is partly retained underground, while CO₂ embedded in construction materials can remain locked in for long periods. Even so, large-scale and sustained emission reduction depends primarily on geological storage.

India has significant storage potential across multiple geological formations. Oil fields could store around 1.204 gigatonnes of CO₂. Coal reservoirs offer an estimated capacity of 3.5–6.3 gigatonnes. Deep saline aquifers in sedimentary basins may hold approximately 291 gigatonnes, while basalt formations could sequester between 97 -316 gigatonnes. Together, these formations provide India with substantial long-term storage options.

Barriers to Large-Scale CCUS Deployment

Despite its potential, CCUS adoption in India faces three major constraints.

First, India lacks a comprehensive regulatory framework for CO₂ storage. There are no clear rules governing site selection, permitting, monitoring, closure, or post-closure liability. This creates uncertainty around environmental safety and long-term responsibility, particularly since storage obligations may extend beyond the lifespan of project operators.

Second, CCUS remains costly. Capture costs vary widely making projects economically challenging without policy support.

Third, India’s technology readiness level for CCUS applications remains limited. While some uses are commercially proven, others are still at early stages of development, requiring sustained investment in research and deployment.

Policy Measures to Enable CCUS

A structured policy response is essential to unlock CCUS at scale. Lifecycle carbon assessments should be undertaken to ensure that supported CCUS pathways deliver genuine net emission reductions.

A dedicated regulatory framework for CO₂ storage is critical. This should address the entire lifecycle of storage projects, including post-closure obligations. International models, such as the European Union’s Directive on geological storage of CO₂, offer reference points.

Financial support will also be necessary. Dedicated funds, viability gap funding, and operational subsidies can reduce investment risk. The US model of providing tax credits per tonne of CO₂ stored or utilised demonstrates how incentives can accelerate private sector participation.

Market creation measures—such as mandating the use of carbon-based construction materials in public procurement—can drive demand. India may also consider phased CO₂ storage obligations for the oil and gas sector, like approaches adopted in Europe.

Finally, sector-specific policies should complement a national CCUS framework, recognising differences in emission profiles and cost structures. In parallel, India should prioritise technology transfer in the short term while investing in domestic R&D for long-term self-reliance.

Conclusion

India’s path to net-zero will require more than renewable energy expansion. CCUS offers a practical solution for addressing emissions from sectors where alternatives are limited. With clear regulation, targeted incentives, and a focus on long-term storage, CCUS can become a cornerstone of India’s decarbonisation strategy—supporting both climate goals and industrial growth.

If you want to cooperate with us and would like to reuse some of our content,
please contact: contact@energetica-india.net.

Next events

REconnect Annual Flagship Summit 2026

May 21, 2026

OmniMedia Events stands at the forefront of premier B2B renewable energy event platforms, delivering high-impact conferences, summits, and networking forums that bring together the entire clean energy ecosystem — policymakers, industry leaders,...

more information