New Delhi: The government Sunday announced Rs 20,000 crore outlay for Carbon Capture Utilisation and Storage technologies, and proposed customs duty exemptions to encourage investment in nuclear power and battery energy storage to boost non-fossil fuel-based energy generation.
Carbon Capture Utilisation and Storage (CCUS) technologies aim to reduce carbon emission by either storing or reusing it so that captured carbon dioxide does not enter the atmosphere.
Finance Minister Nirmala Sitharaman, in her budget speech in the Lok Sabha, said, “Aligning with the roadmap launched in December 2025, CCUS technologies at scale will achieve higher readiness levels in end-use applications across five industrial sectors, including power, steel, cement, refineries and chemicals. An outlay of Rs 20,000 crore is proposed over the next 5 years.”
This assumes significance in view of India’s ambitious target of having 500 GW of renewable energy.
Sitharaman also proposed to extend the basic customs duty exemption given to capital goods used for manufacturing Lithium-Ion Cells for batteries to those used for manufacturing Lithium-Ion Cells for battery energy storage systems.
According to the indirect tax proposals, zero import duty is proposed on specified capital goods for use in the manufacture of lithium-ion cells for batteries of Battery Energy Storage System.
She also proposed to exempt basic customs duty on the import of sodium antimonate for use in the manufacture of solar glass.
Presently, 7.5 per cent basic customs duty is levied on sodium antimonate.
Boosting nuclear power is also needed in the country to replace coal-based electricity generation, which serves as a base load.
Sitharaman proposed to extend the existing basic customs duty exemption on imports of goods required for Nuclear Power Projects till 2035 and expand it for all nuclear plants irrespective of their capacity.
About the biogas blended CNG (compressed natural gas), she said, “I propose to exclude the entire value of biogas while calculating the Central Excise duty payable on biogas blended CNG.”
There has been an industry demand for this exemption to boost the bio-energy sector in the country.
Indian Biogas Association (IBA) Chairman Gaurav Kedia said this measure shall open a wider market for bio-CNG/CBG, thus bolstering efforts towards reduced trade deficit.
It is a strong signal of the government’s commitment to clean energy, circular economy principles, and the promotion of domestically produced renewable fuels, he said.
He is of the view that the exemption will improve the cost competitiveness of compressed biogas, encourage greater blending with CNG, and accelerate investments across the biogas value chain.
It will also support farmers, waste aggregators, technology providers, and project developers by strengthening demand and improving project viability, he stated.
Varchasvi Gagal, MD and CEO of Datta Power Infra, said India’s energy transition has moved from aspiration to infrastructure.
This Budget doesn’t just fund renewables, it engineers the foundation of a resilient green superpower, Gagal added.
On CCUS outlay, Rajeev Juneja, President, PHDCCI, said these are incentives aimed at scaling deployment in heavy-emitting sectors like power, steel, cement, refineries, and chemicals.
The funds are intended to incentivise CCUS technology adoption and commercial readiness across multiple industrial sectors, he added.
This allocation is part of India’s broader climate strategy aligned with its net-zero by 2070, he opined.
Investments in carbon capture are critical for hard-to-abate sectors industries where reducing emissions through electrification or fuel switching alone isn’t feasible, he opined.
Budget allocations and strategic funds help de-risk early projects, establish demonstration facilities, and create market incentives for broader technology adoption, he pointed out.
By earmarking multi-year funding, the government is signalling that CCUS is expected to become a structural pillar of India’s industrial decarbonisation pathway, not a niche or transitional tool, he noted.
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