On 1 February, India’s finance minister Nirmala Sitharaman unveiled the government’s budget for 2026, which included a new $2.2bn funding push for carbon capture technologies.
In the absence of its new international climate pledge under the Paris Agreement, the budget offers a glimpse into the key climate and energy security priorities of the world’s third-largest emitter, amid increasing geopolitical tensions and trade challenges.
While Sitharaman’s budget speech did not mention climate change directly, she said: “Today, we face an external environment in which trade and multilateralism are imperilled and access to resources and supply chains are disrupted.”
Sitharaman emphasised that “new technologies are transforming production systems while sharply increasing demands on water, energy and critical minerals”.
The budget sets out: support for the mining and processing of critical minerals and rare earths; import duty exemptions for nuclear power equipment; and support for renewables, particularly rooftop solar.
However, unlike in some previous years, the 2026 budget does not include specific climate adaptation measures.
Below, Carbon Brief runs through five key climate- and energy-focused announcements from the budget.
- Carbon capture, utilisation and storage
- Critical minerals and rare earth ‘corridors’
- Nuclear energy
- Renewables
- Adaptation
Carbon capture, utilisation and storage
The biggest climate-related budget announcement was $2.2bn to support carbon capture, utilisation and storage (CCUS) technologies in India over the next 5 years.
These are technologies that capture carbon dioxide (CO2) as it is released, then use or store it underground or under the sea.
This funding is aimed at decarbonising five of India’s high-emitting industrial sectors – power, steel, cement, refineries and chemicals. These sectors are “staring at the risk” of coming under the EU’s carbon adjustment mechanism (CBAM), even after a recent EU-India trade deal, according to Sitharaman.
The funding is meant to align with a roadmap released last year that sees CCUS as a “core technological pillar” of India’s 2070 net-zero strategy, particularly for “decarbonising sectors where viable alternatives are limited”, notes the government’s roadmap.

According to the Intergovernmental Panel on Climate Change (IPCC) sixth assessment report, however, the need for CCUS to mitigate industrial emissions “may be overestimated”, compared to measures such as energy and material efficiency and electrification.
Speaking to Carbon Brief, Dr Vikram Vishal, a professor of earth sciences at the Indian Institute of Technology, Bombay (IIT-B),, describes the budget move as a “big welcome step for industrial decarbonisation and India’s net-zero ambitions as a whole”.
Vishal says that the funding could go towards getting “big demonstration plants to near-commercial plants” that could entail even bigger investments in the future.
He tells Carbon Brief:
“India is blessed with both onshore and offshore availability for carbon storage. But while utilisation exists, storage has not happened, per se, even at a decent scale. We [would] need to build transportation infrastructure from the point source of capture at scale, on land and offshore. While offshore storage is very low risk, onshore presents a closer proximity to emission sources.”
However, that could also mean closer proximity to densely populated or protected areas.
Vishal adds that India has a very large theoretical storage potential, even a quarter of which would allow for up to 150bn tonnes of CO2 to be stored. This could sustain CCUS for hundreds of years, Vishal says, adding: “And by that time, the energy transition would have happened, right?”
Critical minerals and rare-earth ‘corridors’
Mining, sourcing and processing “critical minerals” and rare earths is another key area of India’s 2026 budget.
It proposes establishing “dedicated rare-earth corridors” in the “mineral-rich” coastal states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to “promote mining, processing, research and manufacturing”. These corridors are intended to complement a $815m rare-earth permanent-magnet scheme announced in November.
In addition, the budget supports “incentivising prospecting and exploration” for rare-earth minerals, such as monazite, as well as others that the government wants to include in its list of “critical minerals”.
Last week, for instance, India classified coking coal – which is predominantly used in making steel – as a “critical and strategic mineral”, removing regulatory measures such as the need to consult affected communities before developing new mines.
Sehr Raheja, programme officer at New Delhi thinktank Centre for Science Environment, tells Carbon Brief that “moving up the critical-minerals value chain” is “increasingly essential” for the energy transition in developing countries.
She adds that some of the measures announced in India’s budget “point in that direction”, explaining:
“Globally, developing countries often stay stuck in the extraction stages of value chains and capture the least value. While duty exemptions for critical mineral processing and battery manufacturing signal intent to build domestic manufacturing capacity, the extent to which these new efforts deliver sustained value will only become apparent over time.”
Rahul Basu, research director at the Goa Foundation, which advocates for “intergenerational equity” in mining, tells Carbon Brief:
“Rare earths are not particularly rare. What is difficult is separating and refining them. China imports ore from around the world, including [the] US. Their competitive advantage lies in processing, including the ability to tolerate high pollution levels.
“India should perfect the processing technology with imported ores first. It is the critical piece. Not mining. We seem to want to mine the same beaches that are already seeing sea-level rise.”
Nuclear energy
The Indian government has also lifted customs duties on imports of nuclear power equipment within the 2026 budget.
Under the changes, equipment for all nuclear power plants will not be subject to customs duties until 2035, irrespective of capacity.
The announcement follows India enacting a landmark new nuclear act, dubbed the “Shanti” act, in December 2025. This seeks to privatise and invite foreign participation in the country’s nuclear energy sector, which has been largely state-run for decades and has a long history of public protests over safety and land-acquisition concerns.

The Shanti act – which is an acronym for “sustainable harnessing and advancement of nuclear energy for transforming India” – aims to help India increase its nuclear capacity tenfold to 100 gigawatts (GW) by 2047.
This coincides with 100 years since India’s independence and is “the year India aims to attain developed-nation status”, according to prime minister Narendra Modi.
Renewables
Support for renewables in India’s budget this year is significant, but “uneven”, experts tell Carbon Brief.
Allocations to India’s Ministry of New and Renewable Energy (MNRE) grew by 24% to a “record high” in the 2026 budget, with the bulk going to the prime minister’s flagship rooftop solar scheme. The government also cut import duties on lithium-ion cells for battery storage systems, as well as on inputs for solar-panel glass manufacturing.
However, Vibhuti Garg, South Asia director for the Institute for Energy Economics and Financial Analysis, tells Carbon Brief that spending on wind energy and – “more critically” – on transmission and energy storage has either “stagnated or declined” this year.
Garg says grid infrastructure is “fundamental” to renewable expansion. She explains:
“Transmission infrastructure and storage are fundamental to integrating higher shares of renewable energy into the grid. As renewable penetration rises, these elements become not optional but indispensable, and the current level of support falls short of what is required.”
Adaptation
The budget does not announce any specific adaptation measures or schemes, although it does mention a plan to develop and rejuvenate reservoirs and water bodies and to “strengthen” fisheries value chains in coastal areas.
The budget does not mention or include measures related to heat stress or its impact on productivity and workers in sectors such as agriculture.
According to India’s national economic survey tabled ahead of the budget, adaptation and “resilience-related” domestic spending “surged” from 3.7% of the country’s GDP in 2016-17 to 5.6% in 2022-23.

Yet, unlike earlier budgets, allocations to and expenditure from India’s National Adaptation Fund for Climate Change are not separately visible in the 2026 document.
Harjeet Singh, climate adaptation expert and founding director at the Satat Sampada Climate Foundation, tells Carbon Brief that this budget was a “missed opportunity” and a response “not commensurate to the needs [for adaptation] on [the] ground or investment at the scale of crisis that we are facing”.
Singh adds that it fails to recognise the “huge” economic impacts already being felt in India. He says:
“If a budget doesn’t recognise how climate change is already eroding India’s development – causing huge economic losses – and is going to affect our GDP growth, it means that you aren’t really acting, or nudging states to do more.
“It was a missed opportunity to tell the world that we do see adaptation as a problem and we are acting on it, but we also need international cooperation.”
The post Five key climate and energy announcements in India’s budget for 2026 appeared first on Carbon Brief.
Five key climate and energy announcements in India’s budget for 2026
Climate Change
How a Brazil-led roadmap can rescue global pledge to halt deforestation
Marcelo Behar is the COP30 Special Envoy for Bioeconomy and co-founder of Ambition Loop Brazil.
Can we be the generation to end the rampant deforestation that is harming the planet’s ecosystems and climate? Back in February, the Brazilian COP30 Presidency opened a call for submissions on its proposed Roadmap for Halting Deforestation and Forest Degradation, which closes today.
What might look like a technical step quickly drew significant attention, with more than 100 responses submitted by governments, civil society organisations, businesses and other stakeholders.
This level of engagement is telling. It reflects both the urgency of the issue and the recognition that this process could shape whether the global goal to end deforestation by 2030 finally moves from ambition to delivery.
As a Brazilian, I see this moment with both pride and realism. Brazil has played a central role in elevating forests on the climate agenda, and the COP30 Presidency has shown leadership in carrying this issue forward far beyond the Belém summit.
COP30 rainforest fund unlikely to make first payments until 2028
But last year also offered a sobering signal. Despite strong efforts from the Brazilian Presidency, the proposed roadmap did not secure consensus in the final outcome of COP30. That outcome underlined a simple truth: while there is broad recognition of the importance of forests, agreeing on how to move forward remains complex. The road ahead is still long and likely uneven.
That is precisely why this moment matters.
Progress on commitments falling short
The world is not short of commitments. Over the past decade, countries have repeatedly pledged to halt and reverse deforestation by 2030. There is a growing body of experience through the REDD+ (Reducing Emissions from Deforestation and Degradation) programme, including the emergence of jurisdictional approaches that are beginning to connect forest protection with finance at scale.
Initiatives such as the Forest and Climate Leaders’ Partnership have helped sustain political attention and cooperation among countries, while national strategies continue to evolve, and Indigenous Peoples and local communities remain at the forefront of protecting forests.
And yet, progress is still falling short.
The gap is not only one of alignment. It is also one of political will – and of having a credible, shared pathway that brings together these efforts in a way that drives implementation at scale.
Civil society is watching this process closely. For many organisations working across climate, nature and conservation, this is not just another initiative – it is a priority. After years of advocating to end deforestation, there is a strong sense that this moment cannot be lost. The expectation is clear: this roadmap must move beyond intention and help unlock real progress.
The opportunity now is to ensure that it does exactly that. This cannot become another report.
Implementation key to roadmap success
A detailed assessment of pathways and challenges, however valuable, will not be enough to change outcomes on the ground. What is needed is an implementation roadmap, one that connects existing commitments, aligns incentives and provides clarity on how to move from ambition to delivery between now and 2030.
The consultation process is an important step. But its value will ultimately be judged by what it produces.
If the roadmap is to succeed, several priorities should guide its development.
First: policy. It must be designed as a tool for implementation. That means going beyond diagnosis to define concrete action: who needs to act, by when, and how progress will be tracked. The solutions are not new, but coordination has been missing.
Second: accountability. It should bring coherence to the existing landscape. The value of a roadmap lies not in creating new commitments, but in connecting what already exists: global targets, REDD+ experience, national action plans, Indigenous leadership and supply chain initiatives. Reducing fragmentation is essential to accelerating delivery.
Early milestones needed
Third: finance. It must be grounded in economic reality. Halting deforestation will not happen without addressing the incentives that underpin it. Aligning public finance, private investment, and market demand with forest protection is not a technical detail; it is the core of the transition.
Fourth: transparency. Legitimacy will depend on openness. A credible roadmap cannot be developed behind closed doors. Governments, Indigenous Peoples and local communities, civil society, business and finance actors all have a role to play and must be able to see how their contributions shape the outcome.
Fifth: urgency. Progress must be visible in 2026. Without early milestones, momentum will fade. By the time climate negotiators gather in Bonn mid-year, the roadmap should have a clear structure, priority actions and growing political backing.
Governments must deliver on the plan
Finally, countries themselves will need to step forward. Last year’s outcome showed that support alone is not enough. Delivering this roadmap will require active political engagement. That means governments that are willing not only to participate in the process, but to help shape and implement it.
Brazil has created an important opening. It has also taken on the responsibility that comes with leadership: to help turn a widely supported idea into something that can deliver in practice.
The commitment to end deforestation by 2030 already exists. What is still needed is a path. And the courage to walk it.
The post How a Brazil-led roadmap can rescue global pledge to halt deforestation appeared first on Climate Home News.
How a Brazil-led roadmap can rescue global pledge to halt deforestation
Climate Change
UK imports of “green” jet fuel linked to Amazon deforestation
A US biofuels producer that exports “green” aviation fuel to Britain and the European Union has purchased beef tallow from a Brazilian supply chain tied to illegal deforestation in the Amazon, shipping data and a court document show.
Diamond Green Diesel (DGD), a major provider of sustainable aviation fuel (SAF) and renewable diesel, has sourced hundreds of thousands of tonnes of beef tallow from Brazil, alongside waste fats from other sources, over the last three years, as global demand for biofuel feedstocks soars.
Reporting by Unearthed and nonprofit investigative outlet Repórter Brasil reveals DGD’s connection to a rendering plant that has sourced supplies from a meatpacker fined for buying cattle from an illegally deforested Amazon reserve. A previous investigation by Reuters and Repórter Brasil found DGD had bought animal fat from two other rendering factories linked to supplies of cattle from illegal ranches.
The newly identified factory, Pacífico Indústria e Comércio de Óleos e Proteínas Ltda, which is based in Cacoal, a small city in the far-western Amazon state of Rondônia, has been supplied by Rondônia meatpacker DistriBoi, a 2022 court document shows.
DistriBoi was fined two years ago for illegally purchasing cattle from the state’s Jaci-Paraná conservation reserve, which has been ravaged by illegal ranching.
There is no suggestion that the companies involved were aware of deforestation at farm level. But the findings suggest a traceability gap in the supply chain of feedstocks for sustainable fuels, where cattle by-products are subject to less oversight than the primary commodities of the cattle industry, such as meat and leather.


Pristine rainforest blanketed the Jaci-Paraná reserve when it was created 30 years ago to protect traditional forest activities such as rubber tapping and nut harvesting.
Today, illegal ranching has devoured nearly 80% of its forest cover and it has become a notorious example of the devastation wrought by land grabbers in the world’s largest rainforest.
“The damage to biodiversity has been devastating,” said local Indigenous activist Neidinha Suruí, who featured in the 2025 Emmy Award-winning documentary “O Território”.
“It is sad to see what has been lost,” she said.
Greener air travel?
The “renewable diesel” and sustainable aviation fuel (SAF) that are being exported by DGD – a joint venture between US oil refiner Valero Energy Corp and Texas-based Darling Ingredients – are classed as “green” because they are made from feedstocks classified as waste, including tallow, which consists of fat separated from cattle carcasses.
Many governments and airlines are pinning their hopes for greener flying on SAF made with organic waste materials, including Britain which introduced a compulsory blending requirement last year.
Top green jet fuel producer linked to suspect waste-oil supply chain
Air travel accounts for about 2.5% of global carbon emissions and in contrast to other transport sectors that can be electrified, shrinking aviation’s carbon footprint is much more difficult.
Waste products such as beef tallow and used cooking oil (UCO) are considered the greenest of viable SAF feedstocks on the grounds that they do not create competition with foodstuffs such as soy oil or palm oil, nor increase deforestation pressure.


But there is concern that the global rush to ramp up SAF use could indirectly exacerbate deforestation pressure by increasing demand for feedstocks such as tallow and UCO.
That could increase the profit margins of cattle ranches – including illegal ones – and have other unintended consequences, such as encouraging fraud in supply chains, as Climate Home News has reported.
An investigation published in March by Climate Home News and Swedish broadcaster SVT found that Finnish biofuels giant Neste is sourcing key ingredients for its SAF from an opaque supply chain that enables fresh palm oil to be passed off as used, waste oil.
Because tallow is classified as waste by regulators in markets including the UK and EU, the green fuel industry’s most widely used certification scheme – International Sustainability and Carbon Certification (ISCC) – does not assess whether forests were cleared to rear the cattle that produced it in the first place.
This allows tallow from cattle to qualify as a sustainable feedstock for green fuels, even if they were raised on illegally deforested land.
“There is clearly an oversight within the rules if the products, in this case animal tallow, are originally coming from deforested land,” said Cian Delaney, a campaign coordinator at the clean transport and energy advocacy group Transport & Environment.
That means government SAF mandates aimed at stemming air travel emissions could help boost the earnings of cattle ranchers linked to illegal deforestation in Brazil, where ranching and other forms of agriculture have been the main driver of forest loss.
Land grabbers clear way for ranchers
Once covered by an unbroken rainforest canopy, Rondônia’s Jaci-Paraná reserve has been decimated by illegal deforestation driven by cattle ranching – a major cause of tree loss in the Amazon.
Land-grabbers have seized – often violently – and cleared more than three-quarters of its forest for pasture, as ranching has steadily advanced into the southern Amazon.
Suruí, the local Indigenous activist, said companies that buy products derived from illegal activities perpetuate environmental crimes in the rainforest.
“If there were no meat processors buying illegally sourced cattle, there would be no land grabbing and no deforestation,” Suruí told Repórter Brasil, which partnered on the new investigation with Unearthed, and a team of journalists supported by JournalismFund Europe.
Lawsuits and linked supply chains
Brazilian President Luiz Inácio Lula da Silva has pledged to end all deforestation in the country by 2030, in part by strengthening environmental enforcement in the world’s biggest rainforest.
In Rondônia, authorities have launched more than 50 lawsuits related to land-grabbing and deforestation in the Jaci-Paraná reserve alone. Local slaughterhouse DistriBoi is named in 31 of the lawsuits, including the 2024 case in which it was fined.
According to the 2022 court document, which concerned an unrelated labour dispute, lawyers for Pacífico refer to DistriBoi as the rendering plant’s “largest supplier of raw materials”.
US-based DGD received almost 15,000 tonnes of tallow from Pacífico from 2023 to 2025 at its Texas refinery, as well as used cooking oil from various countries and sources, according to trade database Panjiva.


Darling Ingredients is also a parent company of Pacífico since its 2022 acquisition of Brazilian rendering company FASA Group.
A spokesperson for Darling Ingredients denied that Pacífico had sourced beef residues from DistriBoi’s Ji-Paraná slaughterhouse – one of two that the meatpacker operates in Rondônia.
“The rendering plant Pacífico does not source any materials from the slaughterhouse Distriboi in Ji-Paraná,” the spokesperson said in an emailed response, without providing evidence or commenting directly on the content of the 2022 court document.
Darling did not respond to a follow-up question about Distriboi’s other slaughterhouse in the region, which, according to cattle transfer documents, has also bought from a farm that has illegally cleared forest within the extractive reserve.
“Our relationships are typically with the slaughterhouse, several levels removed from cattle ranchers. Regardless, we are committed to ensuring our raw materials are deforestation free. We expect our raw material suppliers to abide by our supplier code of conduct. In addition, we are in the process of requiring all [the] raw materials to attest that their material is deforestation free,” the spokesperson said in a statement.
DistriBoi said in an apparent reference to the pending Jaci-Paraná lawsuits that “the matters mentioned … are already under review, including by higher courts”. It has previously denied wrongdoing. The company’s statement did not address a question about its commercial ties to Pacífico.
Valero Energy, the major refiner that co-owns DGD with Darling Ingredients, did not respond to requests for comment, nor did DGD itself.
From slaughterhouse to SAF
In an effort to rein in carbon emissions from air travel, regulators in Britain and the EU have mandated progressively increasing SAF blending quotas in the years ahead, creating a new market for feedstocks including beef tallow.
Brazil’s exports of tallow to the US have risen sharply in recent years, up from less than 10,000 tonnes in 2021 to almost 400,000 tonnes last year, according to Panjiva, reflecting growing demand for biofuels like SAF.
In the UK, Europe’s biggest aviation market by seat capacity, jet fuel was required to contain 2% SAF by the end of 2025, rising to 10% by 2030 and 22% by 2040.
DGD shipped 134,000 tonnes of SAF worth nearly $90 million from Texas to the UK in 2025, according to trade data from Panjiva. The company also exported smaller amounts of renewable diesel to Britain.
The EU received biofuels, including small quantities of SAF, worth over $1.1 billion from DGD’s Texas refinery last year, figures show.
Is the world’s big idea for greener air travel a flight of fancy?
Unearthed’s investigation could not identify which airlines or airports buy DGD’s SAF once it arrives in Britain.
Valero, DGD’s other parent company, is positioning itself as a key player in the transition to lower-carbon fuels in the UK, where it markets its renewable diesel under the Texaco brand.
It has been an active participant in SAF policy discussions and has criticised the government’s planned cap on waste fat sources in SAF, calling them “the world’s most cost-effective production route for SAF” in a submission to parliament.
Helping to cut emissions?
Even tighter oversight over SAF feedstocks is crucial to ensure that blending mandates such as Britain’s are effectively lowering emissions, said Anna Krajinska, a director at Transport & Environment UK.
Forests store vast amounts of carbon; when they are cut down or burned this carbon is released into the atmosphere.
“If there’s tallow coming from land that’s been deforested, then those emissions might be so high that you might not be getting to the greenhouse gas reduction threshold,” Krajinska said.


But as the world’s appetite for flying keeps on growing, some experts say SAF is the only viable means to reduce aviation emissions at present.
Referring to the deforestation links identified in Unearthed’s investigation, Wouter Dewulf, an aviation economist at Belgium’s University of Antwerp, said it “would be important to assess how large this infraction is”.
“I’m quite sure you have aberrations,” Dewulf added. “But biofuels are the best alternative for the moment.”
T&E’s Delaney said there needs to be less opacity and better oversight from regulatory authorities. “Right now, there are just too many blindspots,” he added.
The post UK imports of “green” jet fuel linked to Amazon deforestation appeared first on Climate Home News.
UK imports of “green” jet fuel linked to Amazon deforestation
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