10. Industrial Decarbonization: Scaling CCUS for India’s Net-Zero Future

In Union Budget 2026-27, the government has introduced a strategic incentive scheme for Carbon Capture, Utilization, and Storage (CCUS) with an outlay of ₹20,000 crore over five years. This initiative marks a critical shift toward \'Hard-to-Abate\' sector decarbonization, ensuring that India’s industrial growth remains compatible with its Net-Zero 2070 commitment. • Incentivizing CCUS at Scale: The ₹20,000 crore outlay is designed to bridge the gap between laboratory research and industrial-scale deployment. It focuses on five high-emission \'point source\' sectors: Power, Steel, Cement, Refineries, and Chemicals, which together account for roughly 60% of India’s industrial CO₂ emissions. • Alignment with 2025 R&D Roadmap: The scheme operationalizes the \'R&D Roadmap for CCUS\' launched in December 2025 by the Department of Science and Technology (DST). This roadmap prioritizes translational R&D to improve the technological readiness levels (TRL) of disruptive carboncapture methods like oxy-fuel combustion and membrane separation. • Enabling the Blue Hydrogen Economy: By capturing emissions from fossil-fuel-based processes, CCUS serves as a primary enabler for Blue Hydrogen production. This allows industries like steel and cement to transition toward cleaner fuels while utilizing existing coal and gas infrastructure. • Nuclear and BESS Integration: Complementing the CCUS push, the budget extends Basic Customs Duty (BCD) exemptions for nuclear power components and Battery Energy Storage Systems (BESS). These measures aim to provide a carbon-neutral \'baseload\' to the grid, supplementing intermittent solar and wind energy. • Economic and Strategic Value: NITI Aayog estimates that CCUS deployment could create 8-10 million jobs by 2050. Furthermore, by converting captured CO₂ into value-added products like green urea, methanol, and carbonated building materials, India can foster a circular carbon economy and reduce import dependence. • Legislative Support for Nuclear Expansion: The push for a 100 GW nuclear capacity by 2047 is backed by the SHANTI Bill, 2025, which modernizes nuclear laws and allows for private and foreign participation (up to 49% equity) in the civil nuclear sector, specifically for Small Modular Reactors (SMRs). Key Definitions • Carbon Capture, Utilization, and Storage (CCUS): A process that involves capturing CO₂ emissions from industrial sources, transporting it, and either using it to manufacture products (Utilization) or injecting it into deep geological formations for permanent sequestration (Storage).• Hard-to-Abate Sectors: Heavy industries (e.g., Steel, Cement) where CO₂ emissions are inherent to the chemical process or where high-heat requirements cannot easily be met by electricity alone. • Small Modular Reactors (SMRs): Advanced nuclear reactors with a power capacity of up to 300 MW per unit, which are factory-built and easier to deploy in industrial clusters for captive power. • Blue Hydrogen: Hydrogen produced from natural gas or coal where the resulting CO₂ emissions are captured and stored using CCUS technology. Constitutional and Legal Provisions • Article 48A (DPSP): Directs the State to endeavor to protect and improve the environment and to safeguard forests and wildlife. • Article 51A(g) (Fundamental Duties): It is the duty of every citizen to protect and improve the natural environment. • Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025: Replaces legacy nuclear laws to enable private participation and grants statutory status to the Atomic Energy Regulatory Board (AERB). • Environment (Protection) Act, 1986: Provides the overarching legal framework for regulating industrial emissions and implementing climate-related standards. Additional Keypoints for Analysis • Cluster Model: The R&D roadmap advocates for CCUS Clusters, where multiple industrial units share common CO₂ transport pipelines and storage sites to achieve economies of scale. • Sequestration Potential: India has a theoretical storage capacity of nearly 600 Gigatonnes (Gt) in saline aquifers and depleted oil/gas fields (e.g., Bombay High, Kutch Basin). • Carbon Credits: The CCUS scheme is expected to integrate with the Indian Carbon Market (ICM), allowing companies to monetize captured emissions through carbon credits. Conclusion The 2026-27 Budgetary push for CCUS signifies a pragmatic approach to the energy transition. Rather than an abrupt exit from fossil fuels, India is choosing to \'decarbonize the fossil fuel\' by investing in capture technologies. This strategy protects industrial competitiveness and energy security while moving the needle toward the 2070 Net-Zero target. UPSC Relevance • GS Paper III: Conservation, environmental pollution, and degradation; Science and Technologydevelopments and their applications; Energy (Nuclear, BESS, Hydrogen). • GS Paper II: Government policies and interventions for development in various sectors (SHANTI Bill, 2025). • Prelims: Net Zero 2070 target; components of CCUS (Capture, Utilization, Storage); SHANTI Bill provisions; and the location of major CO₂ storage potential in India.