Carbon Capture Set To Get A Big Boost

In a strategic move to combat climate change, India is considering ground-breaking measures, including viability gap funding (VGF), carbon credits, and subsidies, to propel Carbon Capture, Utilisation, and Storage (CCUS) initiatives.

With a potential value of $10 billion, a comprehensive CCUS policy is anticipated to be unveiled later this year.

A high-ranking industry official revealed, "Options like carbon credits, subsidies, or providing VGF for projects are being considered to give a push to carbon capture and usage." These incentives are projected to unlock a multi-billion-dollar opportunity for the industry, paving the way for the development of innovative products like green ammonia, green urea, and green hydrogen over the next five years.

The move comes as a pivotal step in the global fight against climate change. CCUS processes not only promise a substantial reduction in emissions but also offer the prospect for oil and gas companies to utilise captured CO2 for enhanced oil recovery (EOR) from mature oil fields or chemical production. This initiative aligns with major economies worldwide, where CCUS projects are already operational or in the execution phase.

Drawing inspiration from successful models like those in the United States, where manufacturers capturing carbon can earn tax credits, Indian officials are exploring similar avenues. In the U.S., companies can receive tax credits of $50 per metric tonne of CO2 if stored permanently or $35 per metric tonne if the CO2 is utilised, such as in EOR.

Addressing the current cost challenges, officials emphasised the need for viability. "Currently, the cost of CO2 at around $58–60 per tonne from a refinery is very high. For it to be viable, we need to work it down," stated the first official. This forward-thinking approach signals India's commitment to embracing sustainable solutions and fostering a greener future.