By Ashu Jain, Executive Director, Green Power International
The Indian Government’s plan for the formulation of a Rs 389 billion carbon capture, utilisation, and storage (CCUS) programme is a noteworthy step towards achieving the net zero goal by 2070. Proposed to be implemented in a phased manner, the initiative is expected to include several sub-schemes with varying levels of government support. This approach aims to bridge the existing gap in the system by promoting technological innovation, supporting industrial adoption, and creating a framework for large-scale carbon mitigation. While it is a reforming and requisite step, the success of the programme hinges a lot on the affordability, adaptability, and efficient implementation to truly make it impactful, particularly in the case of hard-to-abate sectors.
CCUS: A crucial step towards net zero
Carbon dioxide is the most abundant human-emitted greenhouse gas, responsible for global warming and climate change. And CCUS technology helps to reduce its concentration in the atmosphere by capturing it directly from the industries and later storing or utilising it. Capturing the carbon dioxide at the source can lower its presence in the atmosphere and advance India’s net zero 2070 goals.
The set-up is specifically significant for hard-to-abate sectors such as cement, steel, chemicals and others, where carbon dioxide is not only released from burning fossil fuel but also as a direct byproduct of raw materials. CCUS offers a practical solution where alternatives are costly or unavailable. It enables cleaner use of coal and supports technologies such as blue hydrogen. Additionally, it can help India meet international climate targets and protect export competitiveness amid global carbon regulations, such as carbon border adjustment mechanism.
Existing policies and challenges
India has charted an ambitious CCUS target of 750 million tonnes per annum by 2050 and is set to launch its carbon market by 2026. However, to achieve this objective, we need to address the existing gap in the system. The storage rights and long-term liability issues in the CCUS setup remain unresolved, which limits private sector investment. India’s carbon market is also at the nascent stages, and the current prices won’t cover full CCUS costs; subsidy frameworks also lack clarity. Regulations and site mapping are also weak. Only a few large projects exist, but high cost and energy penalties are hindering deployment.
The Rs 389 billion CCUS programme to be rolled out by the government would need to address these pressing issues. Strong legal, financial, and institutional frameworks are urgently needed, and the initiative must have them in place to succeed. A full assessment of scale, affordability, and industrial readiness will only be possible once the complete details are released.
Affordability: The costs of CCUS and implications
Setting up the CCUS system in India is costly, especially in sectors like steel, cement, and power, which are major contributors to carbon dioxide but operate on tight margins. Capturing carbon dioxide is also expensive, and costs increase further when transport and storage facilities are included, depending on distance and site type. Globally, the cost of carbon capture varies from $15 to $20 per tonne for industrial processes with highly concentrated streams of carbon dioxide. It rises to $40 to $120 per tonne for more diluted gas streams, such as in power generation. In India, the cost is much higher, making government support necessary. Geological storage limitations, mismatches between sources and sinks, and an inadequate transport network further add to the challenges. CCUS also competes for funds that could go to renewables or energy efficiency, raising questions about long-term affordability and prioritisation.
Learning for global experience
While CCUS is at a nascent stage in India, several countries around the world have made significant strides in this direction. Norway has introduced the Northern Lights Project, a commercial service that collects carbon dioxide from European industries, ships it to Norway, and injects it into deep underground formations for permanent storage. In the UK and EU, effective subsidy packages, industrial cluster alignment, and carbon dioxide transport networks have proven effective in minimising carbon emissions. The US provides tax credits, research and development support, and regional hubs, while Australia and Canada repurpose existing oil and gas infrastructure for carbon capture and storage. Their initiatives and measures are valuable lessons for our country to adapt and customise as per our unique industrial and environmental needs.
Protecting the Earth by mitigating the risk of climate change is a collective responsibility. Governments’ policies and initiatives alone cannot make much of a difference if stakeholders are not committed to the cause and take active steps towards embracing a sustainable carbon management system. So, to make the government program a success story for other countries to follow, we must work together to build a strong and resilient framework for carbon mitigation.
