Incentives on cards to boost carbon capture

BETUL(GOA): Viability gap funding (VGF), carbon credit, or subsidies may be introduced, among other options, to support and facilitate Carbon Capture, Utilisation, and Storage (CCUS) that has a $10-billion potential. A CCUS policy is likely to be published later this year, officials said.

"Options like carbon credits, subsidies, or providing VGF for projects are being considered to give a push to carbon capture and usage," said a senior industry official, adding that such incentives will open up a $10 billion opportunity for the industry over the next five years as new product lines like green ammonia, green urea, green hydrogen etc will open up.

In the fight against climate change, processes for CCUS are essential. It will not only reduce emissions but also help oil and gas companies use the captured CO2 for enhanced oil recovery (EOR) from mature oil fields or for the production of chemicals. All major economies have CCUS projects under operation and execution. For instance, in the US, manufacturers that capture carbon from operations can earn tax credit to the tune of $50 per metric ton of CO2 if stored permanently or $35 per metric tonne of CO2 if the CO2 is used, such as for EOR.


Officials added that India may consider something similar. "Currently the cost of CO2 at around $58-60 per tonne from a refinery is very high. For it to be viable, we need to work it down," the first official added.

As the third-largest CO2 emitter in the world, India has decided to reduce the emission intensity of its GDP by 33- 35% by 2030.

"We are looking at the CCUS models from the US and Europe. But we must tailor it for India as India has a multi-layered strata. We can't be as stringent as Europe as we are still a coal-based economy. So one has to see that the new CCUS policy does not become a deterrent for the growth of the industries," the second official said.