Union Budget 2026-27 Carbon Capture Utilisation and Storage (CCUS) Technologies

Union Budget 2026-27: Carbon Capture Utilisation and Storage (CCUS) Technologies — Strategic Pivot or Incremental Fix?

The Union Budget 2026-27 marks a pivotal moment for India's climate strategy through an outlay of ₹20,000 crore for Carbon Capture Utilisation and Storage (CCUS) technologies. This initiative aligns with India's net-zero emissions pledge by 2070, yet raises critical questions about the interplay between technological readiness and policy ambition. The conceptual framework underpinning this development—"curative vs preventive environmental strategy"—positions CCUS as a reactive mechanism to neutralize hard-to-abate emissions rather than proactively shifting industrial processes toward renewable or circular systems.

UPSC Relevance Snapshot

• GS Paper III: Environment, Conservation, Climate Change, Technology policies.
• GS Paper II: Government Policies, International Agreements (Paris Accord).
• Essay: Balancing economic growth with sustainability—curative strategies as a transitional phase.

Institutional Landscape

The legal and governance framework for CCUS in India is still emerging, though foundational steps have been taken. Key institutional actors include the Department of Science and Technology (DST) and dedicated research hubs such as IIT Bombay. The focus on field-scale industrial applications is commendable, yet policy coherence across ministries remains a challenge.

• Legal Frameworks: The absence of a CCUS-specific law contrasts with developed countries like the US, where the "45Q tax credit" incentivizes carbon sequestration.
• Major Institutions: DST’s R&D roadmap for 2030, Centres of Excellence like JNCASR, and funding through budgetary allocation.
• Target Sectors: Steel, cement, refineries, chemical industries—critical for both emissions control and economic competitiveness.

The Argument: Data and Evidence

Despite the optimism, deployment challenges loom large. The International Energy Agency (IEA) underscores that current CCUS technologies capture less than 0.5% of global CO₂ emissions annually. India faces dual constraints: the technical challenge of scaling indigenous solutions and the financial burden of large-scale applications.

• Budget Allocation: ₹20,000 crore aims to advance technology readiness levels, yet industry-scale deployment remains five years away.
• Global Data: Only 50 million tonnes of CO₂ are captured globally per year against 40 billion tonnes emitted (IEA).
• Domestic Potential: Mapping large-scale storage sites, such as basalt formations, provides geologically stable opportunities for sequestration.

Counter-Narrative: Is CCUS a Long-term Fix or Short-term Patch?

Critics argue that CCUS, as a curative solution, diverts resources from preventive approaches like renewables and demand-side energy efficiency. The Environmental Defense Fund has noted that reliance on CCUS risks delaying systemic transformations toward low-carbon economies. Thus, India’s allocation could inadvertently reinforce fossil fuel lock-in.

Additionally, technological uncertainties, including leak-proof storage and carbon-utilization scalability, challenge the long-term efficacy of CCUS implementations.

International Comparison: India vs Norway

Structured Assessment

• Policy Design: Adequate funding but lacks clear legislative frameworks akin to Norway's CCS laws.
• Governance Capacity: Coordination gaps between DST, industry bodies, and state governments.
• Behavioural/Structural Factors: Resistance from industries due to upfront costs and uncertain economic payoff.