Carbon Capture, Utilization, and Storage (CCUS) in India has been more about conceptualization over the last decade and a half than about implementation and execution. However, this paradigm is now changing.
What has changed?
The Indian CCUS ecosystem is now significantly different due to the following developments:
- The release of the CCUS R&D roadmap by the Department of Science and Technology (Dec 2025)
- The launch of the five cement sector CCUS testbeds (May 2025)
- The ₹20,000 crore push for CCUS in the Union Budget 2026-27
But while these developments are significant and represent the transition from the “if” to the “how” of CCUS in India, the question is: Can India now overcome the three structural challenges that have historically limited CCUS adoption and implementation?
- High capture costs
- Inadequate storage infrastructure
- Inadequate business models
This blog offers five strategic observations on the Indian CCUS landscape and its implications for CXOs looking to make strategic long-term bets.
- India Already Has a Working CCUS Model – It Just Wasn’t Called That
India’s CCUS story did not start in 2026. It started quietly nearly two decades ago in the fertilizer industry. At IFFCO’s Aonla unit, approximately 450 tonnes of CO₂ are captured daily and reused as feedstock for urea manufacture. Similar capture units operate at IFFCO’s Phulpur plant (~450 tonnes/day) and Indo Gulf’s Jagdishpur unit (~150 tonnes/day) — bringing the combined operational CO₂ capture capacity across these three plants to approximately 1,050 tonnes per day1.
This is not experimental deployment. These are industrial-scale CO₂ capture systems that have been operating continuously in Indian conditions for years, with IFFCO being the first company in the Indian urea industry to adopt CO₂ recovery technology for production.
An important technical nuance must be recognized: CO₂ capture in fertilizer plants is process-integrated, with high-concentration CO₂ from ammonia production reused as urea feedstock. This is fundamentally different from post-combustion capture in cement, steel, or power, where CO₂ is diluted and mixed with flue gases. While the fertilizer pathway is at TRL 9, applying it to hard-to-abate sectors requires substantial engineering.
Strategic Implication
India does not need to start from zero on CCUS. What the country already possesses — and has possessed for decades — is something more valuable than a pilot project: proof that CO₂ capture infrastructure can be built, staffed, operated, and maintained at industrial scale within the Indian operating environment.
The more efficient path forward is not to import technology frameworks, but to use existing domestic operational experience as the foundation and adapt it — with appropriate engineering investment — into sectors where CCUS is non-negotiable for net zero:
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- Cement — where 55–60% of emissions are chemically unavoidable without capture
- Steel — where blast furnace CO₂ cannot be eliminated through efficiency alone
- Thermal power — where coal retirement timelines create a window for CCS as a bridging solution
- Chemicals — where several plants already handle CO₂ streams that could be scaled up
The fertilizer sector’s experience also provides India with a domestic talent base — engineers and operators who have run amine-based and Benfield-process CO₂ separation systems — which is an asset that is systematically underrecognised in national CCUS planning discussions.
CXO Consideration
Before commissioning expensive external studies, Indian industry should first interrogate what has already been proven at Aonla, Phulpur, and Jagdishpur. The challenge is not a lack of knowledge but one of engineering translation—and India’s strongest CCUS pathway may lie not in importing Western models, but in scaling its own industrial know-how.
- Storage Is the Critical Bottleneck — and Oil & Gas Companies Hold the Key
While carbon capture technologies in India span TRL 5 to TRL 9, the same cannot be said for CO₂ storage — not because the underlying science is unknown, but because the technology has not yet been deployed in the Indian geological context.
Globally, the primary storage pathways — saline aquifers, depleted hydrocarbon fields, and CO₂-EOR, are technically mature, sitting at TRL 7 to 9. In India, however, the deployment readiness for these same pathways remains at TRL 3–4. The geology has been mapped. The engineering is understood. What does not yet exist is the regulatory framework, the financing structure, or the operational infrastructure to put CO₂ into the ground.
India’s storage potential is substantial, estimated at 649 Gt 2 across formation types, of which 326 Gt sits in deep saline formations and 316 Gt in basalts, with the remainder in oil fields and coal formations. Geological assessments confirm very high storage feasibility across several basins:
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- The Cambay Basin — including the Gandhar Field, identified in India’s CCUS Roadmap as the primary candidate for a pilot injection project
- The Krishna–Godavari Basin — in close proximity to major industrial emission sources
- Deccan Volcanic Province basalts — covering over 500,000 sq. km., with significant mineral carbonation potential, but currently without a single pilot or commercial-scale project
- Mumbai Offshore fields — with depleted reservoir potential
Despite this mapped potential, India has yet to inject a single tonne of CO₂ for permanent geological storage.
This gap is less technological and more institutional and economic. Geological storage and its trapping mechanisms are well understood — the trapping science, reservoir modelling, and injection engineering have been proven over decades of global oil and gas operations. What India lacks is not the knowledge base, but the policy instruments, long-term financing mechanisms, and designated institutional ownership to convert mapped potential into operational infrastructure.
The UK’s CCUS Cluster Sequencing Programme demonstrate how large-scale storage can be unlocked when governments de-risk early economics and oil and gas majors bring subsurface expertise and execution capability. Clusters like the East Coast Cluster and HyNet illustrate a model India could adapt for building its own storage ecosystem3.
Strategic Implication
India’s storage ecosystem will be built by entities that already hold what cannot be quickly assembled — subsurface expertise, injection capability, and balance sheet strength — which points directly to ONGC and Oil India as the only institutions in the country that combine all three.
With ONGC and IOCL already having signed an MoU for CO₂-EOR at the Gandhar Field in Gujarat, the most viable entry point is established: EOR generates revenue to offset storage costs, leverages existing injection infrastructure, and produces the subsurface performance data needed to de-risk the larger dedicated storage projects that must follow4.
CXO Consideration
The real question for energy company CXOs is not whether CO₂ storage infrastructure will emerge in India — it will — but who will control the injection sites, pipeline corridors, and reservoir data when it does, because that entity will set access terms and influence carbon market pricing for decades.
Early movers who progress from MoU to operational injection ahead of the regulatory framework being finalised will shape India’s storage architecture; those who arrive late will find the best reservoirs already allocated and the infrastructure economics already set by others.
- The Cement Testbeds Signal a Smart Public Innovation Strategy
On National Technology Day, 11 May 2025, DST launched India’s first cluster of five CCU testbeds targeting the cement sector, each structured as a three-way consortium of government funding, academic R&D, and an operational industrial deployment environment. Academic partners span IIT Bombay, IIT Kanpur, IIT Tirupati, IIT Madras, BITS Pilani Goa, CSIR-IIP, and IISc. Industry partners are JK Cement, JSW Cement, Dalmia Cement, and UltraTech Cement — with JSW participating in two testbeds5.
Each testbed pursues a distinct technological pathway — oxygen calcination with CO₂ product conversion (JK Cement), CO₂ mineralisation (JSW Cement), catalyst-driven capture (Dalmia Cement), vacuum swing adsorption with closed-loop materials reintegration (JSW Cement), and innovative carbon-lowering process interventions (UltraTech Cement) — making this a portfolio-based innovation programme rather than a single-technology bet.
Strategic Implication
The most valuable output will not simply be captured carbon. It will be learning curves, engineering capability, and cost benchmarks generated under Indian operating conditions that no overseas pilot can replicate — and which will anchor future project financing, regulatory design, and carbon market standards. The institutions inside this ecosystem will have substantial influence over the technical and policy frameworks that follow.
CXO Consideration
For cement sector CXOs, participation in these testbeds is the earliest available mechanism for building internal CCUS capability before CCTS compliance makes it a commercial necessity. The companies currently hosting testbeds are accumulating operational data, trained personnel, and regulatory relationships that cannot be acquired quickly from a standing start. The question for those outside the ecosystem is not whether the capability gap is opening — it is whether it will be manageable or structural by the time it becomes urgent.
- The 2040s Emissions Peak Compresses the Deployment Timeline
India’s BUR-4 (December 2024) reports 2020 GHG emissions at 2,959 MtCO₂e — a historical inventory, not a peak projection. India’s official position, stated at COP26, places the emissions peak between 2040 and 2045, with CEEW’s analytical scenarios aligning a 2040 peak with the 2070 net-zero commitment as the most internally consistent pathway.
The structural challenge is not uniform across sectors. Power and transport retain multiple decarbonisation pathways — renewables, electrification, hydrogen. Process industries do not. In cement (limestone calcination), steel (iron ore reduction), and chemicals, a significant share of emissions is chemically inherent — embedded in the production process itself, unreachable by fuel switching or efficiency improvements alone.6
Strategic Implication
For these sectors, CCUS is the primary decarbonisation lever. DST’s CCUS Roadmap (December 2025) reflects this directly, targeting 750 million tonnes of captured CO₂ from hard-to-abate sectors by 20507 .Power companies have optionality. Cement and steel companies, for their process emissions, structurally do not.
CXO Consideration
The actionable planning horizon is not 2070 — it is the current decade. Industrial CCUS projects carry 8 to 12 year development lead times from feasibility to commissioning. Deployments that need to be operational before post-peak compliance pressure arrives must begin now. Companies treating 2070 as the planning horizon are misreading the timeline. The window for first-mover advantage — in capability, storage access, and regulatory influence — is open now and will not remain so.
- Policy Architecture Remains the Missing Foundation
Despite strong policy signals, India’s CCUS ecosystem still lacks several foundational regulatory mechanisms. The NITI Aayog CCUS report (2022) and the DST roadmap (2025) 8 both outline key requirements — carbon pricing or economic incentives, storage regulations and liability frameworks, transport and infrastructure business models, and cluster-based project sequencing. Most remain undeveloped.
Storage regulation is the most foundational gap. Questions around pore-space ownership, monitoring and verification standards, and long-term liability remain unresolved — without which no storage project can reach financial close or attract long-term capital.
Carbon pricing presents a structural problem that India’s own market history makes clear. PAT — operational for over a decade across 500+ industrial units — has seen every ESCert in its most recent cycle trade at the government-set floor price, with chronic oversupply and documented compliance gaps. It has functioned as a compliance formality rather than a price discovery mechanism. CCTS is more sophisticated in design, but its projected carbon credit price of ₹600–900 per tonne inherits the same constraint: in a fast-growing economy with intensity-based targets, absolute emissions can rise even as the market appears to be functioning. Either way, the number falls an order of magnitude short of the ₹4,200–8,400 per tonne that industrial CCUS requires to be commercially viable. Carbon pricing is a necessary condition — India’s market history suggests it is not, by itself, a sufficient one.
Infrastructure business models represent the third gap. The UK addresses this through three distinct instruments — ICC contracts (per-tonne revenue support for industrial emitters), Revenue Support Agreements (de-risking T&S infrastructure, with the East Coast Cluster signing its RSA in December 2024), and CfDs (for power-with-CCUS). Each targets structurally different economics within the same cluster. India has no equivalent for any of the three. Without tariff models and long-term CO₂ transport and storage offtake contracts layered on top of carbon pricing, projects cannot reach financial close regardless of technical readiness.
Strategic Implication
The ₹20,000 crore Budget 2026-27 allocation can fund pilots — it cannot create an industry. Without instruments that address capture economics, transport and storage risk, and carbon price floors simultaneously, India’s allocation will produce demonstrations but not the commercial-scale deployments that a net-zero trajectory requires.
CXO Consideration
India’s CCUS policy frameworks are currently being drafted by inter-ministerial technical committees. The terms that emerge — eligibility criteria, cost pass-through provisions, revenue support structures — will govern industrial CCUS economics for decades. Companies that engage now with operational cost data and financing constraints will shape those terms. Those that wait will find the architecture already set by others.
India’s CCUS story in 2026 is not yet one of large-scale deployment. But it is the first moment when all foundational components are simultaneously emerging:
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- Operational experience from the fertilizer sector
- Geological storage potential across multiple basins
- Innovation ecosystems through national testbeds
- Public capital via the ₹20,000 crore allocation
- Strategic policy blueprints from NITI Aayog and DST
What remains is execution.
The window for building India’s first generation of commercial CCUS projects is narrow. With the emissions peak approaching in the mid-2040s, the next decade will determine whether India develops domestic CCUS capability—or remains dependent on imported solutions.
For corporate leaders, the central question is no longer whether CCUS will become a defining industrial technology.
The question is who will lead its deployment in India.
In an industry that could shape the competitiveness of Indian manufacturing for the next half century, waiting on the sidelines may prove the most expensive strategy of all.
Footnotes
- ¹ ResearchGate / PMC — commercial CCS plants in India (Aonla 450 TPD, Phulpur 450 TPD, Jagdishpur 150 TPD)
- ² CEEW — CO₂ storage potential and sequestration in India
- ³ East Coast Cluster / CCUS Hub — UK cluster model
- ⁴ ONGC press release — ONGC–IOCL MoU, 1 July 2019
- ⁵ DST / PIB — CCU cement testbeds launch, 11 May 2025
- ⁶ IEA / IPCC — process emissions in cement and steel
- ⁷ Down to Earth — DST CCUS Roadmap, December 2025
- ⁸ NITI Aayog CCUS Report 2022 + DST CCUS Roadmap 2025
