India’s Budget 2026 signals policy support for carbon capture, but startups still face hurdles around financing, offtake certainty, and long-term viability.
Carbon capture has long hovered at the edge of India’s climate strategy. Budget 2026 brings it closer to the center — but not yet into the realm of bankable reality.
The government’s policy signals recognize carbon, utilization, and storage (CCUS) as essential for decarbonizing hard-to-abate sectors such as steel, cement, and power.
What the Budget changes
Budget 2026 introduces incentives and long-term intent, reducing regulatory uncertainty — a key barrier for climate startups.
However, it stops short of guaranteeing offtake or pricing certainty.
Why startups struggle
It is capital-intensive, infrastructure-heavy, and slow to scale.
Startups face:
- Long payback periods
- Unclear revenue models
- Dependence on industrial partners
Without guaranteed buyers, financing remains speculative.
What would make it bankable
Experts argue startups need:
- Long-term contracts
- Carbon pricing mechanisms
- Blended finance
Until then, carbon capture remains strategically important — but financially fragile.
A necessary first step
Budget 2026 does not solve carbon capture’s economics. But it moves the conversation from “if” to “how.”
That alone is progress.
