Carbon Credit Programme: CCUS vs Agriculture Debate

CCUS Focus for Hard-to-Abate Industries

• The Budget allocation is based on the Department of Science and Technology’s (DST) R&D Roadmap for CCUS (December 2025)
• Targets sectors: power, steel, cement, refineries, and chemicals
• These sectors are classified as “hard-to-abate” industries due to concentrated and measurable emissions
• Objective: capture carbon dioxide from industrial emissions (flue gases) and either utilise or store it underground
• ₹20,000 crore is allocated for large-scale deployment of CCUS technologies over five years

Exclusion of Agriculture from CCUS

• Agriculture is not included in CCUS sectors
• Recognised only as a source of emissions (methane, nitrous oxide) in inventory terms
• Excluded because:
  • Emissions are diffuse and biologically mediated
  • Not suitable for point-source capture technologies
• Distinction made between:
  • CCUS: prevents new industrial emissions
  • Carbon Dioxide Removal (CDR): removes existing atmospheric CO₂, where agriculture plays a role (soil carbon, agroforestry, biochar)

Farmer Carbon Credit Narrative

• Parallel narrative suggests farmers can earn income through carbon credits via sustainable practices
• Promoted in media and public discourse as “farms as climate solutions”
• Linked to growing voluntary carbon markets where agriculture and forestry projects generate credits

Source of Confusion

• Conflation of:
  • Budget CCUS programme (industrial focus)
  • Voluntary carbon markets (agriculture-based credits)
• Use of the broad term “carbon credit programme” in the Budget created ambiguity
• Expectation of farmer-focused schemes due to ongoing discussions on soil health and climate-resilient agriculture

Policy and Communication Issues

• Indicates a communication gap between technical policy design and public interpretation
• CCUS roadmap is sector-specific and technology-intensive, while carbon farming requires:
  • Separate policy
  • Distinct funding
  • Institutional frameworks
• Government needs to clarify distinctions to manage expectations

Climate Strategy Implications

• CCUS programme is critical for industrial decarbonisation, a sector contributing about one-fourth of India’s emissions
• Simultaneously, agriculture presents a parallel opportunity for carbon sequestration
• Highlights need for a multi-sectoral climate approach addressing:
  • Industrial emissions (smokestack)
  • Agricultural carbon sinks (soil)