For a long time, Carbon Capture, Utilization and Storage (CCUS) technology was considered the solution to India’s climate problem; however, recent policies, funding, and industry developments show that the technology is now progressing from theoretical discussions into real action. With hard-to-abate industries facing increasing pressure to decarbonize, CCUS is emerging as a strategic capability rather than an experimental initiative.
Several recent milestones have accelerated this transition. The Department of Science and Technology’s CCUS roadmap, national funding support in the Union Budget 2026–27, and the launch of multiple cement-sector CCUS demonstration projects collectively signal stronger government commitment toward developing a domestic carbon capture ecosystem.
There is no tabula rasa here – in the Indian fertilizer sector, CO2 has already been captured and reused for many years as a component of the process of producing urea, which proves that CO2 capture works well within India’s conditions. Although these systems are technically different from those needed for sectors like cement production, steel production, and thermal power, they still offer practical experience and engineering know-how.
Nevertheless, one of the biggest hurdles is located outside the realm of carbon capture. The development of permanent carbon storage capacity in India is far from complete, even though the geological capacity is plentiful in salt aquifers, depleted oil and natural gas fields, and basalt formations. Establishing regulatory frameworks, financing mechanisms and transport infrastructure will be essential for enabling commercial-scale projects.
The cement sector is now becoming a major field for innovation. There are government-funded CCUS test beds involving top academic organizations and large cement producers that test several technologies for carbon capture under actual conditions. The results of such experiments will contribute to setting benchmarks and the commercialization process.
For sectors such as cement, steel and chemicals, CCUS is expected to play a critical role because a significant proportion of their emissions originate from industrial processes rather than fuel consumption. These process emissions cannot be eliminated through renewable energy adoption or energy efficiency improvements alone, making carbon capture an increasingly important decarbonization pathway.
Despite the positive momentum, a number of policy gaps still exist. Regulations for long-term storage, business models of carbon transportation and storage, and financing options to make the projects financially viable need further work. Overcoming such hurdles is critical to scaling up from pilot operations to commercially viable operations.
India already has the building blocks in place to create its own domestic CCUS ecosystem, including industrial know-how, policy guidance, research capability, and government investments. The next step will hinge on proper implementation and cooperation between industries and regulatory agencies. Companies that start developing their CCUS competencies and assessing CCUS opportunities now will have an edge in the future, when carbon management becomes a key factor in industrial competitiveness and sustainability.
Read the complete analysis on Snowkap to explore the strategic implications of CCUS for Indian industries
