As per a new Wood Mackenzie report, with an envisaged Carbon capture, utilisation, and storage (CCUS) capacity of 123 Mtpa to be achieved by 2050, the actualisation of this mega project will require $4.3 billion in government support.
To fulfil a net-zero pathway, India must hasten decarbonisation efforts and therefore must focus on CCUS adoption for a major reduction in carbon emissions. But carbon prices projected in India may not be sufficient for industrial players to cover CCUS costs, and thus extreme government incentivisation will be needed.
Importance of Government Support
In the report titled ‘Country Insight: Five Ways India Could Enable CCUS,’ it is stated that while a carbon market with strong regulations could eventually bring some measure of independence from direct government financing, there would always remain a need for financial support from the government.
“$4.3 billion of government support is critical to ensure viability for the proposed capacity given that the projected carbon prices in the country may be insufficient to cover the weighted levelized cost for emitters adopting CCUS,” the report further adds.
By 2050, India’s CCUS capacity is expected to account for about 15% of the total CCUS output for the entire Asia-Pacific region, a remarkable rise from less than 5% each year from now to 2035.
India’s Emission Challenge
According to Hetal Gandhi, Lead CCUS Analyst for Asia-Pacific at Wood Mackenzie, India ranks third in carbon emissions in the world and has its share of emissions rated to increase from the current 8% to 14% by 2050.
The report goes further to highlight that accelerating CCUS deployment will be essential to balance the industrial growth of India with environmental sustainability.
Were it not for proper financial support and policy encouragement, such low-carbon transitions in India may face several open-ended challenges in developing the alternative cleaner industrial stream.
The Road to Net-Zero
For carbon capture technology to be adopted at scale, India needs to:
- Create a wise market for carbon to lessen dependence on subsidies.
- Provide economic incentives and taxation benefits for industries already implementing CCUS.
- Enforce regulatory stability so that the private sector is encouraged to join.
- To invest in infrastructure and research to reduce CCUS costs.
As the nation strives for net-zero standards, promoting a scalable and economically viable CCUS ecosystem will be pertinent in ensuring carbon-negative pathways and sustainable energy futures.
