India’s push to back carbon capture, utilisation and storage (CCUS) in the latest Union Budget has reignited a long-running global debate: can a technology that has struggled for over three decades finally deliver on its promise—or is it once again being asked to do more on paper than it has ever managed in reality?
The Budget’s focus on CCUS, with public funding expected to catalyse investments of nearly Rs 20,000 crore across pilot projects, transport infrastructure and incentives, positions the technology as a central tool for cleaning up emissions from steel, cement, refining and chemicals. These sectors account for a large share of India’s industrial carbon footprint and are often described as “hard to abate”.
Yet global evidence suggests that while carbon capture continues to feature prominently in climate strategies, its real-world impact has remained marginal. Energy-related carbon dioxide emissions rose by 0.8% to a record 37.8 billion tonnes in 2024, driven by increased energy demand despite the rapid growth of clean energy technologies such as wind and solar, according to the IEA. By contrast, all operational CCUS facilities worldwide together capture less than 50 million tonnes of CO₂ annually—roughly 0.13% of global emissions, according to energy think tank Ember.
After three decades of technological development, policy support and billions of dollars in subsidies, carbon capture remains statistically insignificant in the climate fight. That gap between ambition and performance is why climate finance experts are urging caution as India moves towards large-scale public funding.
Saurabh Trivedi, sustainable finance specialist at the Institute for Energy Economics and Financial Analysis, said the Budget allocation reflects welcome seriousness about industrial decarbonisation but cautioned that CCUS faces a fundamental challenge of scale.
“The allocation in the Budget signals serious intent on industrial decarbonisation, which is welcome. But context matters — to meet net-zero commitments, global CCUS deployment would need to scale up roughly a hundredfold by 2050,” Trivedi said.
Big in climate models, small in reality
Carbon capture has long played a central role in international climate scenarios produced by institutions such as the IPCC and the International Energy Agency. These pathways frequently rely on massive future deployment of CCUS to offset continued fossil fuel use and industrial emissions.
Academic reviews of these scenarios reveal a persistent pattern: CCUS expands dramatically in projections while remaining limited in practice. A recent review of IPCC and IEA pathways, published in Energy Research & Social Science, found that for over three decades climate models have pushed large-scale carbon capture into the future even as real-world deployment consistently lagged behind expectations.
To align with global net-zero pathways, CCUS capacity would need to rise from today’s tens of millions of tonnes to several billion tonnes annually by mid-century—a pace of expansion unmatched by any major industrial technology in history.
Clean energy races ahead as CCUS ticks up
Long-term transition data from Ember underlines where climate progress is actually occurring. Over the past decade, global solar generation has increased more than tenfold, while wind power has more than tripled. Clean electricity accounted for nearly 40% of global power-sector growth in 2023 alone. In many countries, renewable energy is now the cheapest source of new power.
Carbon capture, by contrast, has grown slowly and unevenly, largely dependent on public subsidies and tax incentives.
“The difference is simple economics,” said an expert who requested anonymity. “Technologies that become cheaper scale rapidly. CCUS has remained expensive and complex, so deployment remains fragile.”
High-profile projects that fell short
Several high-profile projects illustrate the challenges. In the US, the Petra Nova project in Texas was mothballed for three years because of poor economics before being restarted under new ownership in late 2023, highlighting the technology’s financial volatility.
Even in countries with carbon pricing, CCUS struggles commercially. In the US, tax credits now exceed $85 per tonne of captured carbon, yet many projects remain financially fragile.
Beyond cost and performance, scientists are questioning whether carbon capture can scale safely. A major study published in Nature last year by researchers from Imperial College London significantly downgraded earlier estimates of global underground storage capacity, warning that geological constraints, pressure build-up and leakage risks could sharply limit how much carbon dioxide can be safely stored over long periods.
Beyond cost and performance, scientists are now questioning whether carbon capture can scale safely. For India, where suitable geological formations remain poorly mapped and largely untested, this presents additional technical and regulatory challenges.
At the same time, proven decarbonisation pathways continue to accelerate. Solar power costs have fallen nearly 90% since 2010. Wind, battery storage and grid technologies continue to become cheaper. Electrification of industrial processes is expanding, and green hydrogen is emerging as a pathway for low-carbon steelmaking. In cement, low-clinker materials and alternative binders are cutting emissions at source.
“These solutions are delivering because they are becoming cost-competitive,” another expert said. “CCUS still depends heavily on continuous public support.”
A narrow role — not a silver bullet
None of this means carbon capture has no use. Certain emissions are extremely difficult to eliminate entirely with existing technologies. For these narrower applications, targeted CCUS could help manage residual emissions.
The danger, analysts warn, lies in elevating CCUS into a central climate strategy rather than treating it as a limited tool of last resort.
“Globally, CCUS has often been used to postpone tougher transitions,” said a senior energy policy expert who requested anonymity.
India’s industrial expansion will inevitably push emissions higher unless rapid decarbonisation occurs. The Budget’s CCUS push reflects a serious attempt to address the most difficult sectors. But global experience offers a clear warning: carbon capture has consistently underperformed its promises.
While renewable energy and electrification are transforming energy systems faster than many policymakers once imagined, CCUS remains slow, costly and uncertain. The challenge for India will be to resist treating carbon capture as a silver bullet and instead apply it selectively, transparently and only where alternatives truly do not exist.