Carbon capture and utilisation (CCU) technologies

26 Feb 2026 GS 3 Environment

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What is CCU?

Carbon Capture and Utilisation (CCU) refers to technologies that:

Capture carbon dioxide (CO₂) from:
- Industrial sources (cement, steel, power plants, chemicals)
- Or directly from the atmosphere (Direct Air Capture)
Convert the captured CO₂ into useful products such as:
- Synthetic fuels
- Chemicals (methanol, olefins)
- Polymers and plastics
- Building materials (carbonated concrete)

Unlike Carbon Capture and Storage (CCS), where CO₂ is permanently stored underground, CCU reuses carbon in economic value chains.

How can CCU reduce CO₂ emissions?

CCU contributes in three major ways:

1. Decarbonising hard-to-abate sectors

Industries like:

Cement
Steel
Chemicals

produce process emissions that are difficult to eliminate through renewables alone. CCU reduces net emissions from these sectors.

2. Displacing fossil feedstocks

If captured CO₂ replaces fossil-based carbon in:

Fuels
Petrochemicals
Construction materials

it reduces demand for fresh fossil extraction.

3. Supporting circular carbon economy

Carbon is:

Captured
Converted
Reused

instead of being emitted into the atmosphere.

However, climate benefit depends on:

Source of energy used for conversion (renewable vs fossil)
Lifecycle emissions accounting

Why does India need CCU?

India is the world’s third-largest CO₂ emitter. Emissions are driven by:

Coal-based power generation
Cement manufacturing
Steel production
Chemical industries

CCU helps India:

Move toward its Net Zero 2070 target
Build new green industrial value chains
Reduce emissions from hard-to-abate sectors
Align with circular economy goals

Where does India stand?

Policy initiatives

Department of Science and Technology (DST) – CCU R&D roadmap
Draft 2030 CCUS roadmap by Ministry of Petroleum and Natural Gas

Industry pilots

Ambuja Cements (Adani Group) with IIT Bombay – CO₂-to-fuels/materials pilot
JK Cement – CO₂ use in lightweight concrete and olefins
Organic Recycling Systems Limited (ORSL) – Bio-CCU using CO₂ from biogas

India is currently in the pilot and early demonstration stage.

EU Bioeconomy Strategy and Circular Economy Action Plan

1. European Commission – EU Bioeconomy Strategy

The EU Bioeconomy Strategy:

Promotes use of renewable biological resources
Encourages conversion of waste and CO₂ into bio-based products
Links carbon reuse with sustainability and climate targets

It integrates CCU into a broader bio-based industrial transformation.

2. EU Circular Economy Action Plan

Part of the European Green Deal, it aims to:

Reduce waste generation
Promote product reuse and recycling
Support carbon reuse technologies
Strengthen sustainable industrial ecosystems

CCU fits as a tool to close carbon loops in industry.

What are other countries doing?

U.S.: Tax credits (e.g., 45Q) to incentivise carbon capture
UAE: CO₂-to-chemicals hubs with green hydrogen
Europe: Steel and cement sector CCU pilots

Example:
ArcelorMittal collaborating in Belgium to convert captured CO₂ into carbon monoxide for reuse in steel and chemical production.

Risks and challenges for India

1. Cost competitiveness

Capture and conversion are energy-intensive
Fossil-based products remain cheaper

2. Infrastructure gaps

Need industrial clusters
CO₂ transport pipelines
Integration with hydrogen infrastructure

3. Regulatory uncertainty

Lack of certification standards
No clear carbon pricing
Weak market demand signals

How can India scale up CCU?

1. Policy incentives

Carbon pricing mechanisms
Production-linked incentives for CO₂-derived products
Tax credits similar to U.S. models

2. Green hydrogen integration

CO₂ + Green Hydrogen → Synthetic fuels and chemicals

3. Cluster-based development

Develop CCU hubs near:

Cement clusters
Steel belts
Refinery zones

4. Public procurement

Government use of:

Low-carbon cement
Green fuels
to create initial demand.

5. Standards and certification

Lifecycle carbon accounting framework is essential.

Conclusion

CCU is not a silver bullet, but it is a strategic tool for:

Industrial decarbonisation
Circular carbon economy
Net Zero transition

For India, scaling CCU requires coordinated policy, infrastructure investment, and market creation mechanisms.

Prelims Practice MCQs

Q. With reference to Carbon Capture and Utilisation (CCU), consider the following statements:

CCU involves capturing carbon dioxide and permanently storing it in geological formations.
CCU can convert captured carbon dioxide into fuels, chemicals and building materials.
The climate benefit of CCU depends on the energy source used for converting CO₂.

Which of the statements given above is/are correct?

A. 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3

Answer: B

Explanation:

Statement 1 is incorrect: Permanent underground storage refers to Carbon Capture and Storage (CCS), not CCU.
Statement 2 is correct: CCU converts CO₂ into useful products such as fuels and materials.
Statement 3 is correct: If fossil energy is used for conversion, net emissions may remain high; renewable energy improves climate benefit.

2. Which of the following sectors are considered “hard-to-abate” and may benefit significantly from CCU technologies?

Cement manufacturing
Steel production
Fertiliser and chemical industries
Solar photovoltaic manufacturing

Select the correct answer using the code below:

A. 1 and 2 only
B. 1, 2 and 3 only
C. 2, 3 and 4 only
D. 1, 2, 3 and 4