CCUS Policy Framework and its Deployment Mechanism in India – NITI Aayog

Carbon Capture, Utilisation, and Storage (CCUS) is important to ensure sustainable development and growth in India, especially for the production of clean energy and products. A study report has been released by NITI Aayog named Carbon Capture, Utilisation, and Storage Policy Framework and its Deployment Mechanism in India. The report explores the importance of CCUS as an emission reduction strategy to achieve deep decarbonisation. The report outlines broad-level policy interventions needed across various sectors for its application.

India has updated its nationally determined contribution (NDC) targets for achieving 50 per cent of its total installed capacity from non-fossil-based energy sources, 45 per cent reduction in emission intensity by 2030, and achieving net zero by 2070. The role of CCUS becomes important as a reduction strategy to achieve these goals.

CCUS can provide a wide variety of opportunities to convert the captured carbon dioxide (CO2) to different value-added products like green urea, food and beverage form application, building materials, chemicals, polymers, and enhanced oil recovery with wide market opportunities in India. This will further contribute substantially to creating a circular economy.

The report indicates that

  • CCUS is required for the decarbonisation of both industrial applications and the power sector.
  • CCUS can contribute to decarbonisation and transition to clean energy systems in various ways. These include ensuring the sustenance of existing emitters, decarbonising hard-to-abate sectors, promoting the low-carbon hydrogen economy, and removal of the CO2 stock from the atmosphere.
  • The mature and commercially proven CO2 capture technologies are classified into chemical solvent-based CO2 capture technologies, physical solvent-based CO2 capture technologies, adsorption-based CO2 capture, and cryogenic CO2 capture.
  • The key to a successful CCUS implementation in India is to enact a policy framework that supports the creation of sustainable and viable markets for CCUS projects. The private sector is unlikely to invest in CCUS unless there are sufficient incentives or unless it can benefit from the sale of CO2 or gain credits for emissions avoided under carbon pricing regimes.
  • Based on the review of the prevailing policy mechanisms in different parts of the world, there are two clear policy choices/approaches for India to adopt, i.e. either carbon credits/incentives-based policy or carbon tax-based policy.
  • To support CCUS in India, it is important to fund and support demonstration scale projects. The financing of CCUS projects at scale can be considered through clean energy cess only, or through bond and gross budgetary support.
  • Promoting CCUS adoption and implementation in India requires a multi-pronged approach to incentivise technology transfer of commercially proven CCUS technologies; promoting R&D in novel technologies, particularly in the area of CO2 utilisation; and encouraging private sector participation in implementing CCUS demo projects.

Click here to read the full report