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Environment & Ecology June 19, 2026 4 min read Daily brief · #12 of 38

Rs 19,700-crore carbon capture scheme gets nod

A Rs 19,700-crore Carbon Capture, Utilisation and Storage (CCUS) scheme has received approval and is awaiting Union Cabinet ratification. The scheme is proje...

GS Paper 3 (Environment Science & Technology Indian Economy)

What Happened

  • A Rs 19,700-crore Carbon Capture, Utilisation and Storage (CCUS) scheme has received approval and is awaiting Union Cabinet ratification.
  • The scheme is projected to attract total investments of approximately Rs 37,500 crore from public and private sources.
  • The scheme aims to create carbon-capture capacity of 7 million tonnes per year across hard-to-abate industrial sectors.
  • The target sectors include power generation, steel, cement, oil refineries, and chemicals — industries where direct emissions reduction is technically difficult.
  • The scheme builds on the Union Budget 2026-27 announcement of Rs 20,000 crore over five years for CCUS deployment, moving the technology from pilot projects to policy-backed industrial scale.

Static Topic Bridges

Carbon Capture, Utilisation and Storage (CCUS)

CCUS is a set of technologies that capture carbon dioxide (CO₂) emitted from industrial processes and fossil fuel combustion, then either store it underground in geological formations or utilise it in industrial processes (such as producing synthetic fuels, chemicals, or building materials). It is considered essential for decarbonising "hard-to-abate" sectors — industries like steel, cement, and chemicals where switching to renewables alone cannot eliminate CO₂ emissions. CCUS differs from afforestation-based offsets in that it removes or prevents emissions at the source.

  • Three components: Carbon Capture (separating CO₂ at emission source), Utilisation (converting CO₂ into useful products), and Storage (injecting CO₂ into geological formations such as saline aquifers or depleted oil/gas fields).
  • India's NITI Aayog released a CCUS report in 2022 recommending policy support for CCUS in hard-to-abate sectors.
  • India's Department of Science and Technology launched the country's first national R&D Roadmap for CCUS in December 2025.
  • CCUS is recognised under the Paris Agreement as a legitimate mitigation tool for achieving net-zero targets.

Connection to this news: The scheme translates India's long-standing CCUS research mandate into an investment-backed industrial deployment programme, signalling that CCUS is now a mainstream climate policy instrument rather than an experimental technology.

India's Climate Commitments and Net Zero 2070

India announced its net-zero emissions target for 2070 at COP26 in Glasgow (2021). As part of its Nationally Determined Contributions (NDCs) updated in 2022, India committed to: (1) reduce emissions intensity of GDP by 45% from 2005 levels by 2030; (2) achieve 50% cumulative electric power capacity from non-fossil fuel sources by 2030. CCUS is increasingly seen as a bridging technology that allows continued industrial activity while meeting these targets.

  • India's NDCs are submitted under the United Nations Framework Convention on Climate Change (UNFCCC).
  • The Paris Agreement (2015) requires parties to submit NDCs every five years with progressively higher ambition.
  • India ratified the Paris Agreement in October 2016.
  • "Hard-to-abate" sectors — steel, cement, chemicals, aviation, shipping — account for roughly 30% of global CO₂ emissions and are the primary target for CCUS.

Connection to this news: The CCUS scheme is a concrete instrument to help India honour its net-zero 2070 pledge while sustaining industrial growth in carbon-intensive sectors.

Production-Linked Incentive (PLI) Model vs. Capital Subsidy Approach

Large green technology deployment in India has primarily used the PLI model (incentivising incremental production over a base year) or direct capital expenditure schemes. CCUS requires upfront capital for infrastructure (capture units, pipelines, storage sites), making a capital outlay approach more appropriate than a per-unit PLI. The Union Budget's Rs 20,000-crore CCUS allocation represents a direct government expenditure model, supplemented by expected private co-investment.

  • PLI schemes (launched from 2020 onward) cover sectors from semiconductors to solar modules, and incentivise production, not capital creation.
  • Capital subsidy models (like the FAME scheme for EVs) provide upfront grants to reduce investment risk.
  • The total expected investment leverage ratio for the CCUS scheme is approximately 1.9x (Rs 37,500 crore investment on Rs 19,700 crore public outlay).

Connection to this news: The scheme's structure — a government outlay designed to crowd in private investment — follows the capital subsidy model, distinct from the PLI approach used for manufacturing sectors.

Key Facts & Data

  • Scheme outlay: Rs 19,700 crore (government expenditure); awaiting Union Cabinet approval as of June 2026
  • Expected total investment mobilised: Rs 37,500 crore
  • Target carbon capture capacity: 7 million tonnes per year
  • Union Budget 2026-27 CCUS allocation: Rs 20,000 crore over five years [Unverified: exact reconciliation between Rs 19,700 crore scheme and Rs 20,000 crore budget allocation pending Cabinet announcement]
  • Target sectors: power, steel, cement, refineries, chemicals
  • India's net-zero target: 2070, announced at COP26 Glasgow
  • India's NDC (2022): 45% reduction in emissions intensity of GDP from 2005 levels by 2030; 50% non-fossil fuel power capacity by 2030
  • NITI Aayog CCUS Report: Published 2022, first comprehensive national policy roadmap
  • National R&D Roadmap for CCUS: Launched by Department of Science and Technology, December 2025
On this page
  1. What Happened
  2. Static Topic Bridges
  3. Carbon Capture, Utilisation and Storage (CCUS)
  4. India's Climate Commitments and Net Zero 2070
  5. Production-Linked Incentive (PLI) Model vs. Capital Subsidy Approach
  6. Key Facts & Data
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