India clears $2.1 billion CCUS scheme for power, steel, and cement: what it means for industrial decarbonisation

India's finance ministry has cleared an INR 197 billion scheme, equivalent to $2.1 billion, to develop carbon capture, utilisation, and storage technologies and reservoirs for large industrial units. The scheme targets three of the country's most carbon intensive sectors: power plants, steel mills, and cement factories. The approval marks one of the largest single state commitments to CCUS infrastructure in the Asia Pacific region and reflects growing recognition that these sectors cannot decarbonise through electrification alone.

Power generation, steel production, and cement manufacturing collectively account for a substantial share of India's industrial emissions, and all three present structural challenges for conventional abatement approaches. Unlike sectors where renewable energy substitution is technically straightforward, each of these industries produces process emissions that are difficult to eliminate without capturing carbon at the point of production. The $2.1 billion commitment is designed to fund both the technology development side and the reservoir infrastructure needed to store captured carbon at scale.

For ESG practitioners and procurement teams tracking Scope 3 emissions in supply chains that run through Indian industrial suppliers, this development is worth monitoring closely. Companies sourcing steel or cement from Indian producers may eventually see carbon intensity figures shift as CCUS capacity comes online, though the timeline for meaningful emissions reductions at scale will depend on how quickly the scheme translates into deployed infrastructure. The announcement does not yet provide project timelines or specific facility targets.

The scheme also has relevance for companies subject to the EU's Carbon Border Adjustment Mechanism, which entered its transitional phase and is now expanding to include downstream products. Indian steel and cement exporters to Europe face CBAM compliance obligations, and domestic CCUS investment could in theory reduce the embedded carbon intensity of those exports over time. Procurement and compliance teams should track whether the scheme's implementation details include any linkage to export market requirements.

Broader context positions this announcement within a global pattern of governments using industrial policy to address hard to abate emissions rather than relying solely on carbon pricing signals. India's move follows similar state backed CCUS commitments in the United States and parts of Europe. For sustainability professionals, the key question is whether the scheme's financing structure will drive genuine technology deployment or primarily fund research, and early project announcements will be the clearest signal of which direction it takes.