Union Budget 2026: Finance Minister Sitharaman Unveils Major Push for Energy Transition with Rs 20,000 Crore CCUS Initiative
In a significant move aimed at accelerating India's shift towards sustainable energy, Finance Minister Nirmala Sitharaman has announced a comprehensive scheme to promote Carbon Capture, Utilisation and Storage (CCUS) as part of the Union Budget 2026. The initiative comes with a substantial financial outlay of Rs 20,000 crore, signaling the government's strong commitment to addressing climate change and reducing carbon emissions.
Key Announcement: Rs 20,000 Crore CCUS Scheme
The Finance Minister detailed that the newly proposed CCUS scheme will focus on developing and deploying technologies that capture carbon dioxide emissions from industrial processes and power generation. This captured carbon can then be either utilized in various industrial applications or stored safely underground to prevent its release into the atmosphere.
The scheme represents one of the largest dedicated investments in carbon management technologies in India's recent budgetary history. It is expected to create new opportunities for research, innovation, and job creation in the green technology sector while helping industries meet their environmental compliance requirements.
Strategic Importance for India's Energy Transition
This announcement comes at a crucial time when India is working towards its ambitious climate goals, including achieving net-zero emissions by 2070. The CCUS initiative is seen as a strategic component of India's broader energy transition roadmap, which aims to balance economic growth with environmental sustainability.
The Rs 20,000 crore allocation demonstrates the government's recognition of CCUS as a critical technology for decarbonizing hard-to-abate sectors such as cement, steel, and power generation. These industries are essential for India's infrastructure development but have traditionally been significant contributors to greenhouse gas emissions.
Expected Impact and Implementation Framework
The CCUS scheme is likely to include several key components:
- Research and development grants for Indian institutions working on carbon capture technologies
- Incentives for industries to adopt CCUS solutions in their operations
- Infrastructure development for carbon transportation and storage networks
- Public-private partnerships to accelerate technology deployment
- Skill development programs to create a workforce specialized in carbon management technologies
Industry experts have welcomed the announcement, noting that while renewable energy expansion remains crucial for India's energy transition, technologies like CCUS are essential for addressing emissions from existing industrial infrastructure that cannot be easily electrified or transitioned to renewable sources immediately.
The Union Budget 2026, with its focus on sustainable development and climate action, positions India as a proactive player in global efforts to combat climate change while pursuing its economic development objectives.
