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Budget gives Rs 20,000 crore: Why India needs carbon capture solutions, challenges it faces

Carbon capture and storage as an option has been around for years, but its large-scale use hasn't kicked off. Here's why, and where the Budget fund allocation can help.

steel industry, carbon emissions, carbon captureIn the steel industry, a majority of CO2 release comes from the production process rather than from burning of fuel. (File)
Written by: Amitabh Sinha
6 min readNew DelhiFeb 5, 2026 06:08 AM IST First published on: Feb 4, 2026 at 01:57 PM IST

Setting aside Rs 20,000 crore for the development of carbon capture, utilisation and storage (CCUS) solutions over the next five years in the Budget, the government has bet big on technologies essential to reducing the carbon footprint of some of India’s critical industries. This will help India achieve the net-zero emissions status in the long term.

What are carbon capture, utilisation and storage (CCUS) solutions?

As the name suggests, CCUS is first about ‘capturing’ carbon dioxide emitted in different industrial processes. The captured carbon dioxide can then be either stored over a prolonged period, like in some special geological formations under the Earth’s surface, or be converted into more useful chemicals.

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