Regional spotlight: Carbon capture, utilization & storage (CCUS) in India — what's different and why it matters

India emitted 2.9 billion tonnes of CO2 in 2024, making it the world's third-largest emitter, yet fewer than 10 CCUS projects have reached operational status across the entire country, capturing a combined total of roughly 1.5 million tonnes per annum (Global CCS Institute, 2025). That figure represents less than 0.05% of national emissions. Meanwhile, India's coal fleet of 210 GW provides over 70% of the country's electricity and is expected to remain above 150 GW through 2040 under every credible scenario modeled by the Central Electricity Authority. For executives evaluating CCUS deployment globally, India represents both the largest decarbonization opportunity and one of the most structurally distinct operating environments in the world.

Why It Matters

India's CCUS landscape diverges from North American and European markets in fundamental ways that reshape project economics, technology selection, and go-to-market strategy. The country lacks a carbon price or compliance mechanism comparable to the EU Emissions Trading System or California's cap-and-trade program. There is no equivalent of the US 45Q tax credit, which provides $85 per tonne for geological storage and $60 per tonne for utilization. India's CCUS economics must therefore close without policy-driven revenue, relying instead on utilization revenues, voluntary carbon markets, and industrial process optimization savings.

India's industrial emissions profile also differs from Western markets. Heavy industry, particularly steel, cement, fertilizers, and refining, accounts for approximately 580 million tonnes of CO2 annually, or roughly 20% of national emissions (Ministry of Environment, Forest and Climate Change, 2025). Several of these sectors produce high-purity CO2 streams (fertilizer plants emit CO2 at 95%+ concentration from ammonia synthesis) that are dramatically cheaper to capture than dilute flue gas from power plants. This industrial emissions mix creates a fundamentally different project pipeline than in markets where power sector decarbonization dominates CCUS investment.

The regulatory framework is evolving rapidly. India's updated Nationally Determined Contribution (NDC) under the Paris Agreement commits to reducing emissions intensity of GDP by 45% from 2005 levels by 2030 and achieving net-zero by 2070. The Department of Science and Technology launched the National CCUS Mission in 2024 with an initial allocation of INR 1,500 crore ($180 million), focused on research, pilot projects, and geological storage characterization. While this funding is modest by global standards, it signals institutional commitment and creates a framework for private sector participation.

Key Concepts

India's Geological Storage Potential

The Directorate General of Hydrocarbons (DGH) completed India's first comprehensive CO2 storage assessment in 2024, identifying theoretical storage capacity of approximately 395 billion tonnes across three primary formation types: deep saline aquifers in the Gangetic Basin and coastal sedimentary basins (estimated at 300 billion tonnes), depleted oil and gas reservoirs in the Cambay, Krishna-Godavari, and Cauvery basins (estimated at 10 billion tonnes), and unmineable coal seams primarily in the Damodar Valley (estimated at 5 billion tonnes with CO2-enhanced coal bed methane potential). The remaining 80 billion tonnes are distributed across basaltic formations and other geological structures (DGH, 2024).

However, theoretical capacity and bankable storage are vastly different figures. Less than 2% of identified formations have been characterized to the level required for commercial injection permitting. India has drilled fewer than 20 dedicated CO2 appraisal wells, compared to over 400 in the US and more than 100 in the North Sea region. Storage site maturation from initial screening to injection permit typically requires 5 to 8 years and $50 to $150 million in characterization costs per site.

Utilization-First Economics

In contrast to markets where geological storage dominates the CCUS business case, India's near-term CCUS deployments are overwhelmingly utilization-focused. The economics reflect local market conditions: CO2-enhanced oil recovery (EOR) at ONGC's Ankleshwar field in Gujarat has demonstrated incremental oil recovery of 8 to 12% of original oil in place, generating revenue of $35 to $50 per tonne of CO2 injected at 2025 oil prices. Chemical conversion pathways, particularly CO2 to methanol and CO2 to urea, benefit from India's status as the world's second-largest fertilizer consumer, with annual urea demand of approximately 35 million tonnes (Department of Fertilizers, 2025).

Carbonation of industrial waste streams, including steel slag, fly ash, and red mud from alumina refining, presents a utilization pathway with minimal additional cost because the alkaline waste materials are available at negative cost (the producing industries pay for disposal). Researchers at the Indian Institute of Technology Bombay have demonstrated CO2 mineralization using steel slag at capture costs of $15 to $25 per tonne, producing construction-grade aggregates with market value of $8 to $12 per tonne (IIT Bombay, 2025).

Policy and Regulatory Architecture

India's regulatory treatment of CO2 injection and storage remains in early development. Unlike the US (which has a mature Class VI well permitting framework under the EPA), India has no dedicated subsurface CO2 storage regulation. The Mines and Minerals (Development and Regulation) Act does not explicitly address CO2 injection, and the Oil Industry Safety Directorate's well integrity standards were designed for hydrocarbon production rather than long-term CO2 containment. The Ministry of Petroleum and Natural Gas has convened an inter-ministerial working group to develop a CO2 storage regulatory framework, with draft regulations expected by late 2026 (NITI Aayog, 2025).

The absence of dedicated regulation creates both risk and opportunity. Projects structured as enhanced oil recovery fall under existing petroleum regulations, providing a clear permitting pathway. Pure storage projects, however, face regulatory ambiguity that increases development risk and can extend project timelines by 2 to 4 years while regulatory clarity is sought through ad hoc government engagement.

What's Working

India's fertilizer sector provides the most commercially advanced CCUS deployment pathway. The Indian Farmers Fertiliser Cooperative (IFFCO) operates a CO2 capture and utilization system at its Phulpur ammonia plant in Uttar Pradesh, capturing approximately 450,000 tonnes of CO2 per year from ammonia synthesis off-gas and converting it to urea. Because the CO2 stream is high-purity (above 98%), capture costs are minimal at $10 to $15 per tonne, and the urea product commands domestic market prices of $250 to $300 per tonne. The system has operated at greater than 92% uptime since 2019, demonstrating reliable performance in India's challenging ambient temperature conditions (45+ degrees Celsius in summer months).

Reliance Industries has committed $2 billion to CCUS development at its Jamnagar refinery complex in Gujarat, the world's largest single-site refinery. The first phase, targeting 1 million tonnes per year of CO2 capture from hydrogen production units, began construction in 2025 with commissioning planned for 2027. The captured CO2 will be used for enhanced oil recovery at nearby mature oil fields and as feedstock for synthetic fuels and chemicals. Reliance's integrated refining-petrochemicals model creates internal utilization demand that reduces off-take risk.

Oil and Natural Gas Corporation (ONGC) has operated India's most significant CO2-EOR pilot at the Ankleshwar field since 2022, injecting approximately 50,000 tonnes of CO2 per year. Results have exceeded expectations, with incremental oil production of 1,200 barrels per day (vs. a projected 800 barrels per day), providing CO2 utilization revenue that covers capture and transport costs at current oil prices above $65 per barrel.

Tata Steel's Jamshedpur facility launched a 5,000-tonne-per-year carbon capture pilot in 2024 using a proprietary amine-based solvent system adapted for blast furnace gas composition. While small in scale, the project serves as a technology validation platform and has attracted co-funding from the European Climate Foundation and the Asian Development Bank, establishing a template for blended finance structures in Indian industrial CCUS.

What's Not Working

India's CCUS ambitions face several structural headwinds that differentiate the market from more mature deployment regions.

The absence of a carbon price or substantial direct subsidy means that most CCUS configurations remain uneconomic for power sector applications. Post-combustion capture from coal-fired power plants costs $60 to $90 per tonne of CO2 in India, and without revenue support, captured CO2 must generate utilization revenues exceeding this threshold to justify investment. This effectively limits near-term deployment to high-purity industrial sources and EOR applications.

CO2 transport infrastructure is essentially nonexistent. India has no dedicated CO2 pipeline network, and the distances between major industrial emission clusters (concentrated in Gujarat, Maharashtra, Jharkhand, Odisha, and Tamil Nadu) and prospective storage sites (primarily in the Cambay and Krishna-Godavari basins) range from 100 to 500 km. Trucking CO2 as a compressed gas or liquid costs $15 to $30 per tonne per 100 km, making transport a significant portion of total CCUS costs for projects without co-located utilization.

Storage characterization remains critically underfunded. The National CCUS Mission's allocation of $180 million over five years is insufficient to characterize even a handful of storage sites to commercial readiness. By comparison, the US Department of Energy's CarbonSAFE program has invested over $500 million in storage site characterization since 2016, and the UK's Track-1 and Track-2 cluster programs have allocated over $1.5 billion in transport and storage infrastructure support.

Workforce capacity presents another constraint. India has fewer than 200 engineers with direct CCUS project experience, compared to several thousand in the US and Norway. Academic programs in reservoir engineering, geomechanics, and subsurface monitoring at Indian institutions produce graduates with relevant foundational skills, but hands-on CCUS expertise requires project-based training that is only now becoming available through international partnerships such as the Indo-Norwegian CCUS collaboration launched in 2024.

Key Players

Established companies: ONGC (CO2-EOR operations and storage characterization in western India), Reliance Industries (integrated CCUS at Jamnagar refinery), Tata Steel (industrial capture pilots at Jamshedpur), NTPC (feasibility studies for capture at coal power stations), Indian Oil Corporation (hydrogen production CCUS at Mathura refinery), IFFCO (commercial-scale CO2 utilization in fertilizer production)

Startups and technology providers: Carbon Clean (modular capture systems with Indian-origin technology deployed globally), Breathe Applied Sciences (direct air capture technology development, Bengaluru-based), GreenJams (CO2 mineralization into construction materials), CarbonMines (CO2-to-chemicals conversion platform)

Investors and development finance: Asian Development Bank (concessional financing for Indian CCUS projects), World Bank (technical assistance for storage site characterization), Japan Bank for International Cooperation (bilateral CCUS financing under the Asia Energy Transition Initiative), Breakthrough Energy Ventures (early-stage CCUS technology investments with India pipeline), Climate Investment Funds (clean technology fund allocations for Indian industrial decarbonization)

Action Checklist

• Evaluate India's high-purity CO2 sources (ammonia plants, hydrogen units, natural gas processing) as priority capture targets with capture costs below $20 per tonne
• Assess CO2-EOR economics at mature western Indian oil fields where infrastructure adjacency reduces transport costs
• Monitor the inter-ministerial working group's draft CO2 storage regulations (expected late 2026) for permitting pathway clarity
• Structure projects to leverage blended finance combining development finance institution concessional lending with commercial equity
• Engage with the Directorate General of Hydrocarbons for access to storage characterization data from the National CCUS Mission
• Build partnerships with Indian academic institutions (IIT Bombay, IIT Madras, IIT Kharagpur) to develop workforce capacity and access emerging research
• Consider utilization-first project structures that generate revenue from CO2-derived products rather than depending on carbon credit revenues alone
• Track voluntary carbon market developments in India, particularly the Bureau of Energy Efficiency's carbon credit trading scheme launched in 2023

FAQ

Q: How does the cost of CO2 capture in India compare to the US and Europe? A: Capture costs vary significantly by source. For high-purity industrial streams (ammonia, hydrogen, natural gas processing), India's capture costs of $10 to $20 per tonne are comparable to or lower than equivalent sources elsewhere due to competitive labor and fabrication costs. For dilute flue gas from power plants and cement kilns, costs range from $50 to $90 per tonne, roughly in line with global averages. The primary cost advantage in India comes from lower engineering, procurement, and construction (EPC) costs, which can reduce total installed capture system costs by 20 to 30% compared to projects in North America or Europe. However, the absence of policy revenue (no 45Q equivalent or carbon price) means net project economics are more challenging despite lower capital costs.

Q: Is geological CO2 storage viable in India? A: The theoretical storage capacity of 395 billion tonnes is more than sufficient, but commercial viability depends on characterization depth that does not yet exist. The most bankable near-term storage is in depleted oil and gas reservoirs where subsurface data from decades of hydrocarbon production provides confidence in containment. Deep saline aquifer storage, which represents the vast majority of theoretical capacity, requires multi-year characterization campaigns that are only beginning. Basaltic formations (the Deccan Traps) offer a potentially unique storage pathway through in-situ mineralization (as demonstrated by CarbFix in Iceland), but research in Indian basalts is at the laboratory stage. Executives should plan for a 7 to 10 year timeline from storage site identification to commercial injection for any non-EOR storage project.

Q: What role will India's carbon credit trading scheme play in CCUS economics? A: The Bureau of Energy Efficiency's carbon credit trading scheme, launched in 2023, initially covers approximately 300 designated consumers across 13 sectors. However, the scheme operates on an intensity-based approach (emissions per unit of output) rather than an absolute cap, and initial carbon credit prices of INR 500 to 1,000 ($6 to $12) per tonne are insufficient to incentivize CCUS investment. Market analysts project prices rising to $20 to $40 per tonne by 2030 as the scheme expands and intensity targets tighten. For CCUS to receive meaningful market support, either a separate performance standard crediting CO2 storage or a significant increase in credit prices will be needed.

Q: Which Indian states are most attractive for early CCUS deployment? A: Gujarat leads due to the combination of major industrial emitters (Reliance's Jamnagar complex, fertilizer plants, petrochemical facilities), proximity to depleted oil and gas fields in the Cambay Basin, existing pipeline infrastructure from the hydrocarbon sector, and a proactive state government that has signaled support for CCUS through its industrial policy. Maharashtra (cement and steel emissions), Jharkhand and Odisha (steel belt), and Andhra Pradesh/Telangana (cement clusters near the Krishna-Godavari Basin storage potential) are also positioned for early deployment.

Sources

• Global CCS Institute. (2025). Global Status of CCS 2025: India Country Profile. Melbourne: Global CCS Institute.
• Ministry of Environment, Forest and Climate Change. (2025). India's Third Biennial Update Report to the UNFCCC: GHG Emissions Inventory. New Delhi: Government of India.
• Directorate General of Hydrocarbons. (2024). National CO2 Storage Atlas of India: Preliminary Assessment. New Delhi: DGH, Ministry of Petroleum and Natural Gas.
• Department of Fertilizers. (2025). Annual Report 2024-25: Urea Production, Import, and Consumption Statistics. New Delhi: Government of India.
• IIT Bombay. (2025). CO2 Mineralization Using Industrial Alkaline Waste: Techno-Economic Assessment. Mumbai: Department of Chemical Engineering, IIT Bombay.
• NITI Aayog. (2025). India's CCUS Roadmap: Policy Framework and Implementation Strategy. New Delhi: National Institution for Transforming India.
• Energy Transitions Commission India. (2025). Decarbonising Indian Industry: The Role of Carbon Capture in Heavy Emitting Sectors. New Delhi: ETC India.