Power ministry to seek Cabinet nod for ₹20,000 crore carbon capture scheme by July

New Delhi: The power ministry is likely to seek Cabinet approval by July for a ₹20,000 crore carbon capture, utilisation and storage (CCUS) scheme and has initiated inter-ministerial consultations, a senior government official told ET.

The FY27 budget had announced incentives for CCUS to support decarbonisation of hard-to-abate sectors such as power, steel, cement and refineries. The scheme will also support emissions reduction in sectors such as iron and chemicals, as well as emerging areas including coal gasification and green hydrogen.

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The aim is to scale up the technology across core industrial sectors including power, cement, refining, steel and chemicals.

The programme is likely to be rolled out in phases, with the first phase expected to run for about six years, an industry official said.

Carbon capture, utilisation and storage is a technology that captures carbon dioxide emissions from large industrial sources such as power plants, steel units and cement factories. The technology remains capital intensive, though costs are expected to ease as deployment scales up, industry experts said.

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It is also particularly relevant for India, where coal-based power continues to anchor the energy mix. The country plans to add 105 GW of coal-based capacity by 2035 to meet rising baseload demand, making CCUS critical to balancing energy security with climate goals.