Carbon capture push in Budget 2026 builds up steel & cement companies’ confidence

Mumbai: The move to earmark ₹20,000 crore for carbon capture, utilisation and storage (CCUS) in the FY27 Budget has bolstered confidence among domestic steel, cement and power producers, who see the move as a clear signal of policy backing for industrial decarbonisation even as they pursue capacity expansion.The allocation, to be deployed over five years, targets hard-to-abate sectors such as steel, cement, refining and power-industries that face high emissions and large capital requirements, and have long sought government support to make low-carbon technologies viable.

“Such support is crucial for aligning India’s steel sector with its global climate commitments while maintaining competitiveness,” said Naveen Jindal, president of the Indian Steel Association and chairman of Jindal Steel.

Steel is among the most carbon-intensive industries, accounting for about 7-9% of global emissions. Indian steelmakers, which largely rely on coal-based blast furnaces, emit around 2.5 tonnes of CO₂ per tonne of steel, higher than the global average of about 2 tonnes. Major producers such as JSW Steel, Tata Steel and Jindal Steel have committed to achieving carbon neutrality between 2045 and 2050, ahead of India’s 2070 net-zero target.

By committing multi-year funding, the government is positioning CCUS as a core element of India’s industrial decarbonisation strategy, said Rajeev Juneja, president of the PHD Chamber of Commerce and Industry.

The cement sector, the second-largest emitter of carbon dioxide with a 7-8% share of total emissions, also welcomed the move. “CCUS is a critical enabler for large-scale decarbonisation and directly addresses the technology and cost challenges faced by the cement industry,” said Parth Jindal, president of the Cement Manufacturers’ Association and head of JSW Cement.