Government think-tank NITI Aayog’s latest study finds that carbon capture utilization and storage (CCUS) is key to ensuring sustainable development and growth in India, particularly for producing clean energy.

CCUS is defined by the International Energy Agency (IEA) as a group of technologies for capturing CO2 from large and stationary CO2-emitting sources such as fossil fuel-based power plants and other industries.

These technologies become crucial in the context of India as the country is still dependent on fossil fuels.

The report titled ‘Carbon Capture, Utilization, and Storage Policy Framework and its Deployment Mechanism in India’ explored the importance of CCUS as an emission reduction strategy to achieve decarbonization from the hard-to-abate sectors.

The report said that nearly two-thirds of India’s 144 metric tons per annum (mtpa) crude steel capacity and 210 GW of coal-based power capacity were installed less than 15 years ago.

These assets can’t be wished away or stranded and need to be made sustainable by retrofitting with carbon dioxide capture and disposition infrastructure, the report said.

Further, it added that significant economic costs, estimated to be in the range of $6 billion per year by 2050, can be avoided by implementing CCUS.

Additionally, even if India can substantially meet the target of 500 GW installed capacity of renewables by 2030, it would still require coal for generating baseload power demand, given the intermittency and non-dispatchable nature of solar and wind power.

“CCUS can enable the production of clean products while still utilizing our rich endowments of coal, reducing imports and thus leading to an Atmanirbhar Indian economy,” said Suman Bery, Vice Chairman, NITI Aayog.

Dr. V.K Saraswat, a member of NITI Aayog, said India’s dependency on fossil-based energy resources is likely to continue in the future, which makes it necessary for the country to have a CCUS policy.

India is the third largest emitter of carbon dioxide in the world after China and the U.S., with an estimated annual emissions of about 2.6 gigatons per annum (gtpa).

The role of CCUS also becomes a crucial strategy in emission reduction as the country has recently updated its nationally determined contribution (NDC) targets to achieve 50% of its total installed capacity from renewable energy sources and a 45% reduction in emission intensity by the end of the decade.

CCUS application and advantages

CCUS can be applied to various sectors hard-to-electrify and carbon dioxide-intensive sectors such as steel, cement, oil & gas, petrochemicals & chemicals, and fertilizers.

Further, it can be used in producing blue hydrogen, which is coal gasification-based hydrogen production coupled with CCUS, considering India’s rich endowments of coal.

Currently, blue hydrogen at the cost of around $2/kg is far more cost-effective than green hydrogen at $5-6/kg.

The report said that CCUS can help the circular economy as the captured carbon can be converted into various value-added products like green urea, building materials, chemicals and polymers with vast market opportunities in India.

The CCUS projects could capture 750 mtpa of carbon by 2050 and help create 8-10 million full-time jobs.

The report outlines a range of policy action the government can undertake to support CCUS. These include funding for research and development, creating national centers of excellence, support for manufacturing CCUS equipment in India, and adoption of the technology on a large scale.

According to a report by the International Energy Agency (IEA) in October, carbon dioxide emissions from fossil fuel combustion globally are expected to grow by under 1% this year as the substantial expansion of renewables and electric vehicles prevents a sharper rise.