A bit of a blur over India’s new carbon credit plan, Pg8

Key Highlights:

• The Union Budget 2026 allocated ₹20,000 crore for a carbon credit programme, sparking confusion regarding its focus.
• The allocation is primarily intended for Carbon Capture, Utilization, and Storage (CCUS) technologies in heavy industries.
• A conflicting narrative suggests the programme aims to create income for farmers through sustainable agriculture.
• Official documents indicate the budget targets "hard-to-abate" industries like power, steel, and cement.

Detailed Insights:

• The Department of Science and Technology (DST) released a roadmap in December 2025, outlining the CCUS plan for industries.
• Agriculture is excluded from the CCUS strategy due to the diffuse nature of agricultural emissions.
• The confusion arises from conflating the industrial CCUS fund with the broader voluntary carbon market in India.
• The Agriculture Ministry has been exploring climate-resilient farming, suggesting a potential for a structured carbon farming program.
• A separate policy is needed to create a trusted domestic carbon market for agriculture, unlocking economic and environmental benefits.
• The government needs to clarify the distinction between industrial decarbonisation and agricultural carbon sequestration.
• India needs a comprehensive, multi-sectoral approach, addressing both industrial emissions and agricultural carbon sequestration.

Key Concepts Involved:

• Carbon Credit: A permit representing one tonne of carbon dioxide removed from the atmosphere.
• CCUS (Carbon Capture, Utilization, and Storage): Technologies that capture CO2 emissions from industrial sources.
• Carbon Sequestration: The process of capturing and storing atmospheric carbon dioxide.

Carbon Capture and Utilisation