- The country to account for close to 15% of Asia Pacific’s CCUS capacity by 2050
India’s adoption of carbon capture, utilisation, and storage (CCUS) is a sine-qua-non as the country struggles to decarbonize, however Woodmac’s latest report discloses that the country will require substantial government’s support, to the tune of US$4.3 billion, (looking at the current market prices,) if the viability of the projected capacity could be achieved.
The report, ‘Country insight: five ways India could enable CCUS,’ highlights that the development of a better carbon market could significantly decrease the reliance on direct government support and enhance the overall feasibility of CCUS projects even as industry reports confirm the country’s readiness to define its emission targets for nine key sectors, beginning with carbon trading from 2026.
“Projected carbon prices in the country is insufficient to cover the weighted levelized cost for emitters adopting CCUS, so strong government support is essential,” Woods said.
“India is currently the third-largest emitter of carbon globally. We anticipate that its share of total emissions will rise from 8% to 14% by 2050 in our net-zero base case scenario,” stated Hetal Gandhi, lead CCUS in Asia Pacific at Wood Mackenzie. “Emissions from power and industrial sectors, which are classified as hard-to-abate, account for 82% of India’s total gross emissions. Therefore, the adoption of CCUS is crucial for the country’s decarbonisation efforts,” Gandhi added.
India according to Woodmac, is projected to account for around 15% of the CCUS capacity in the Asia Pacific region by 2050 in its base case. “This marks a significant rise from less than 5% until 2035,” says Woods. “Our assessment suggests that by 2050, India could potentially achieve a capture capacity of 123 million tonnes per annum (Mtpa), contingent on government incentives. The adoption of CCUS in India is estimated to vary by sector but will be below 10% of capacity across most sectors in our base case. The refining and chemicals industries are expected to lead in this adoption, followed by the power and steel sectors.”
“However, current CCUS project announcements remain low, with only 40 to 50 Mtpa dedicated to storage. While saline aquifers represent a substantial portion of India’s storage potential, the accessibility and suitability of these sites for long-term and large-scale injection still need to be assessed. This will, hence, limit CCUS capacity additions until 2035.
“India’s commitment to reaching net zero emissions by 2070 makes CCUS adoption not beneficial, but inevitable,” said Gandhi. She noted that the country’s young steel industry, high reliance on coal-based thermal power, and significant storage potential all support the adoption of CCUS. However, challenges such as limited upstream experience, a lack of firm storage permitting policies, and an emerging carbon market must be addressed promptly. New avenues of application, like coal gasification with CCUS, should also be tested to enable scale improvement.”
Gandhi concluded, “With the right policies and incentives in place, India can harness CCUS technology to significantly reduce its carbon footprint while continuing its trajectory of economic growth and improving its manufacturing footprint.”