India is preparing a major public funding push for carbon capture, utilization, and storage, also known as CCUS. In the Union Budget for 2026–27, the government set out a plan to support CCUS with a proposed outlay of ₹20,000 crore over the next five years. That is ₹200 billion, which is about US$2.2 billion.
The budget document places the measure under efforts to improve long-term energy security and stability. It also describes CCUS as a scheme with that ₹20,000 crore outlay.
The amount matters because CCUS is expensive and hard to scale. A clear budget line signals that India wants to move beyond small pilots and research projects. It also shows the government is looking for options to reduce emissions in industries that are difficult to clean up quickly.
The plan comes as India faces a practical challenge. The country is building large amounts of renewable energy, but parts of the economy still rely on high-emitting industrial processes.
Cement, steel, refineries, chemicals, and thermal power remain central to growth. These sectors often cannot cut emissions to near zero with renewables alone, at least not in the short term. This is where the government sees a role for carbon capture.
From Policy Papers to Pipes and Storage
The budget measure points to CCUS as a way to raise “technology readiness” and expand end-use applications. In plain terms, that means the government wants more projects that move from study to real equipment in real plants. It also suggests the plan will target large emitting sectors where capture and storage could, in theory, reduce emissions without shutting down existing production too quickly.
India’s Ministry of Petroleum and Natural Gas has already described CCUS as an area where it is working to build a practical strategy and encourage collaboration across the oil and gas sector. That includes planning for how to implement capture, transport, use, and storage options in India’s energy system.
This new budget funding could connect to that effort in two ways.
- First, it can reduce early financial risk for companies. Carbon capture equipment adds cost. It also adds operating needs, such as energy use, maintenance, and monitoring. Without support, many firms delay investment because they do not see a near-term return.
- Second, it can help build shared infrastructure. CCUS is not just one machine, and it often needs pipelines, compressors, monitoring systems, and long-term storage sites. Shared infrastructure can lower costs when several plants connect to the same transport and storage network.
The budget document does not yet list every rule, incentive rate, or eligibility condition in the public summary. But the stated five-year outlay sets a clear ceiling for public support and signals that the government expects a pipeline of projects, not a single pilot.
Why India is Looking at Carbon Capture Now
India has set a long-term goal of net-zero emissions by 2070. That pledge has shaped policy planning across power, industry, fuels, and carbon markets.
In a 2022 press release on a national CCUS policy study, the government highlighted India’s climate direction, including steps toward net zero by 2070 and the need to cut emissions in hard-to-abate sectors.
In late 2025, India also released a national R&D roadmap for CCUS through the Department of Science and Technology. The roadmap aims to guide coordinated action and speed up technology deployment, with a focus on hard-to-abate sectors such as cement, steel, and power.
These moves show a pattern. India is building the “soft” parts of a CCUS system first—research priorities, policy frameworks, and coordination. The budget outlay is a step toward the “hard” parts—real projects and infrastructure.
There is also an external trade pressure. Many Indian exporters expect stricter carbon rules in major markets. Policies such as the European Union’s carbon border measures have pushed firms to look for ways to reduce the emissions tied to their products.
CCUS is one option that can reduce emissions at the facility level, especially in cement, steel, and refining, where process emissions are hard to remove.
At the same time, India still needs to expand its energy supply for growth. That includes reliable power for industry and cities. A CCUS program can fit into this reality because it aims to cut emissions without requiring an immediate shutdown of existing assets.
A Tool for Tough Emissions, Not a Silver Bullet
CCUS works in three main steps. First, a plant captures carbon dioxide from flue gases or industrial streams. Second, it compresses and transports the CO₂. Third, it stores the CO₂ underground or uses it in products such as fuels, chemicals, building materials, or enhanced oil recovery.
In practice, storage is the main constraint. Projects need suitable geology, injection tests, monitoring systems, and long-term rules on liability. Without proven storage, capture alone does not deliver lasting emissions cuts. Below is India’s carbon storage capacity shown in a geological map:
Globally, CCUS remains far below the scale required in net-zero scenarios. The International Energy Agency (IEA) estimates that global carbon capture capacity reached just over 50 million tonnes of CO₂ per year as of early 2025. This is up modestly from earlier years but still far below the levels needed in most net-zero climate pathways.
In its Net Zero pathway, capture rises to 1,024 Mt by 2030 and 6,040 Mt by 2050. As of early 2025, only just over 50 Mt per year of capture capacity is operating worldwide.
The IEA reports that even if all planned projects move forward, global capture capacity will only hit about 430 Mt per year by 2030. The planned storage capacity is around 670 Mt. This gap explains why the IEA stresses faster storage development and shorter project lead times.
India has been laying the groundwork for this challenge. A draft 2030 CCUS roadmap linked to the oil and gas sector compiles early estimates of national storage potential.
It identifies deep saline aquifers as the largest category, with about 291 gigatonnes (Gt) of estimated capacity. It mentions potential storage of 97–316 Gt in basalt formations, 3.5–6.3 Gt in coal reservoirs, and around 1.2 Gt in oil fields for CO₂-enhanced oil recovery. These figures reflect theoretical or early-stage estimates and still require site-level validation.
CCUS is most relevant in hard-to-abate sectors where emissions come from chemistry, not just fuel use. Cement is a clear example. Even with clean power, roughly half of cement emissions come from the calcination process itself. Steel also poses challenges, as the sector emits high carbon.
Costs remain a key barrier. The IEA estimates capture costs of $15–25 per tonne of CO₂ for high-purity industrial streams. In contrast, more diluted streams, like cement or power generation, cost $40–120 per tonne. Transport, injection, and long-term monitoring add further costs and complexity.
These limits explain why CCUS is not a replacement for renewables, efficiency, or electrification. India’s policy shows that the government views CCUS as a helpful tool. It can cut emissions in tough sectors, but only if storage, regulation, and project delivery happen quickly.
Where the Money Goes Will Matter Most
The headline figure—₹20,000 crore over five years—sets the scale. What matters next is how the money is used.
Project selection will shape outcomes. A focus on a few large hubs could support shared CO₂ transport and storage. A scattered approach may fund pilots but limit infrastructure build-out.
Sector priorities also matter. Budget signals point to power, steel, cement, refineries, and chemicals—all high-emitting industries with large and, in some cases, concentrated CO₂ streams.
Rules will be just as important as funding. India is developing an Indian Carbon Market under the Carbon Credit Trading Scheme. Companies will need clarity on whether captured and stored CO₂ can earn credits and under what standards.
Storage readiness remains a final test. Proven sites, test drilling, and long-term monitoring will be essential to move from plans to scale. If these pieces align, public funding could accelerate real deployment. If not, it may support pilots without delivering deep emissions cuts.
For now, the budget line makes one point clear. India is putting real public funding behind carbon capture, and it is doing so with an amount large enough to change corporate planning in several heavy industries.
The post India Puts $2.2 Billion for Carbon Capture in 2026-2027 Budget appeared first on Carbon Credits.
Every business carbon footprint report ends with a number, the amount of carbon emissions produced by the business, less the amount of carbon reduced and offset, given in tonnes of CO₂. Many of the people who sign off on that number, including those who paid for it, cannot picture what it represents on the ground. A tonne is a unit of mass. CO₂ is invisible. The link between the amount offset in the report and a real piece of restored forest somewhere in the world is almost never indicated.
“…Protecting nature makes our business more resilient…”
For companies with land, water, food, fiber, or commodity exposure, the supply chain may be the most practical place to turn nature from a risk into an operating asset.
Your supply chain already has a nature strategy. It may be undocumented. It may live in procurement files, supplier contracts, commodity maps, and one spreadsheet nobody opens without coffee. But it exists.
If your business depends on farms, forests, water, soil, packaging, rubber, timber, fibers, minerals, or food ingredients, nature is part of your operating system. The question is whether you manage that system with intent, or discover it during a disruption, audit, or difficult board question.
That is why more companies are asking how to find Nature-Based Solutions in Your Supply Chain. Do not begin by shopping for offsets. Begin by asking where nature already affects cost, continuity, emissions, regulatory exposure, and supplier resilience.
What Nature-Based Solutions in Your Supply Chain Means
The European Commission defines nature-based solutions as approaches inspired and supported by nature that are cost-effective, deliver environmental, social, and economic benefits, and help build resilience. They should also benefit biodiversity and support ecosystem services.
In supply-chain terms, that becomes practical. Nature-based solutions in your supply chain can include agroforestry in cocoa, coffee, rubber, or palm supply chains. They can include soil health programs for food ingredients, watershed restoration near water-intensive operations, mangrove restoration linked to coastal sourcing regions, and avoided deforestation in forest-linked commodities.
The key test is business relevance. If your procurement team relies on a landscape, watershed, crop, or supplier base, that is where opportunity may sit. The best projects do not hover outside the business like a framed certificate. They plug into the system that already produces your revenue.
Why the Boardroom Should Care
For many companies, the largest climate and nature exposure sits outside direct operations. The GHG Protocol Scope 3 Standard gives companies a method to account for and report value-chain emissions across sectors. Purchased goods, land use, transport, supplier energy, and product use can make direct emissions look like the visible tip of a very large iceberg.
The Taskforce on Nature-related Financial Disclosures notes that many nature-related dependencies, impacts, risks, and opportunities arise upstream and downstream. That is why nature-based supply chain investments matter to boards. You are managing supply security, audit readiness, investor confidence, and regulatory preparedness.
For companies exposed to EU markets, this also connects to rules and expectations such as CSRD, CSDDD, EUDR, and SBTi FLAG.
Step One: Map Where You Touch Land, Water, and Living Systems
Finding Nature-Based Solutions in Your Supply Chain starts with mapping, not marketing.
Begin with procurement and Scope 3 data. Which categories carry high spend, high emissions, or high sourcing risk? Which suppliers depend on agriculture, forestry, mining, water-intensive processing, or land conversion? Which regions face water stress, heat, flood risk, soil degradation, deforestation, or biodiversity pressure?
The Science Based Targets Network uses a clear process for companies: assess, prioritize, set targets, act, and track. That sequence keeps companies from treating nature as a mood board. You identify where the business has exposure, then decide where intervention can create measurable value.
Step Two: Look for Operational Value Before Carbon Value
This is the center of CCC’s Dual-Value Model. A nature-based supply chain investment should do useful work for the business before anyone counts the carbon.
Agroforestry may improve farmer resilience, shade crops, protect soil, and reduce pressure on forests. Watershed restoration may reduce water risk for beverage, textile, or manufacturing sites. Soil health programs may improve the stability of agricultural inputs.
Carbon and sustainability value can still be created. In some cases, the project may support Scope 3 insetting. In others, it may generate verified carbon credits. Sometimes the main value may be resilience, readiness, and better supplier data.
The IPCC has found that ecosystem-based adaptation can reduce climate risks to people, biodiversity, and ecosystem services, with multiple co-benefits, while also warning that effectiveness declines as warming increases. That is a sober argument for acting early.
Step Three: Separate Insetting, Offsetting, and Resilience
Nature-based solutions in your supply chain are not automatically carbon credits. They are not automatically Scope 3 reductions either.
An insetting opportunity usually sits inside or close to your value chain. It may support Scope 3 reporting if the accounting rules, project boundaries, supplier connection, and data quality are strong enough.
An offsetting opportunity usually involves verified credits outside your value chain. High-quality credits can still play a role for residual emissions, but they should not distract from direct reductions or credible value-chain work.
A resilience opportunity may deliver business value even if you cannot claim a Scope 3 reduction immediately. That may include water security, supplier capacity, land restoration, biodiversity protection, or regulatory readiness.
Gold Standard’s Scope 3 value-chain guidance focuses on reporting emissions reductions from interventions in purchased goods and services. Verra’s Scope 3 Standard Program is being developed to certify value-chain interventions and issue units for companies’ emissions accounting. The direction is clear: stronger evidence, tighter boundaries, and more disciplined claims.
Step Four: Design for Audit-Readiness From the Beginning
Weak data is where promising nature projects go to become expensive anecdotes.
Before public claims are made, you need to know the baseline. What would have happened without the project? Who owns or manages the land? Which suppliers are involved? How will outcomes be measured? How will leakage, permanence, and double counting be addressed?
The GHG Protocol Land Sector and Removals Standard gives companies methods to quantify, report, and track land emissions, CO2 removals, and related metrics. This matters because land projects are rarely neat. Farms change practices. Suppliers shift volumes. Weather changes outcomes.
What Recent Corporate Examples Show
Recent case studies show that supply-chain nature work is becoming more serious, and more scrutinized.
Reuters has reported on insetting to reduce emissions within supply chains, including examples linked to Reckitt, Danone, Nestlé, Earthworm Foundation, and Nature-based Insights. The same article highlights familiar problems: measurement, double counting, supplier incentives, and credibility.
Reuters has also reported on companies using the Science Based Targets Network process to examine nature impacts. GSK, Holcim, and Kering were among the first companies with validated science-based targets for nature.
The Financial Times has covered the promise and difficulty of soil carbon in corporate supply chains, including a PepsiCo example in India where yields reportedly increased while greenhouse gas emissions fell. The lesson is that carbon, soil, biodiversity, farmer economics, and measurement need to be handled together.
A Practical Screening Checklist
A supply-chain nature-based solution deserves deeper review when you can answer yes to most of these questions:
- Does it sit in or near a material supply-chain hotspot?
- Does it address a real business risk?
- Can you connect it to supplier behavior, land management, or sourcing practices?
- Can the outcomes be measured?
- Are the claim boundaries clear?
- Does it support Scope 3 strategy, SBTi FLAG, CSRD, CSDDD, EUDR, or investor reporting needs?
- Are permanence, leakage, land rights, and community issues addressed?
Build the Asset, Then Make the Claim
Finding Nature-Based Solutions in Your Supply Chain is about identifying where your business already depends on living systems, then designing interventions that make those systems more resilient, measurable, and commercially useful.
For companies with material Scope 3 exposure, the right project can support supplier resilience, emissions strategy, regulatory readiness, and credible climate communication. The wrong project can become a glossy story with a weak audit trail.
Carbon Credit Capital helps companies design nature-based carbon and sustainability assets that embed directly into corporate supply chains. Through CCC’s Dual-Value Model, you can assess where sustainability investment may support operational resilience, Scope 3 insetting eligibility, regulatory readiness, and high-quality carbon or sustainability value.
Schedule your consultation with the carbon and sustainability experts at Carbon Credit Capital to explore how nature-based supply chain investments can support your next stage of climate strategy.
Sources
- European Commission: Nature-based solutions
- GHG Protocol: Corporate Value Chain Scope 3 Standard
- TNFD: Guidance on value chains
- European Commission: Corporate Sustainability Reporting
- European Commission: Corporate Sustainability Due Diligence
- European Commission: Regulation on Deforestation-free Products
- SBTi: Forest, Land and Agriculture FLAG
- Science Based Targets Network: Take Action
- IPCC AR6 WGII Summary for Policymakers
- Gold Standard: Scope 3 Value Chain Interventions Guidance
- Verra: Scope 3 Standard Program
- GHG Protocol: Land Sector and Removals Standard
- Reuters: Can insetting stack the cards towards more sustainable supply chains?
- Reuters: Three companies put their impacts on nature under a microscope
- Financial Times: The dubious climate gains of turning soil into a carbon sink
Americans are paying more for insurance, electricity, taxes, and home repairs every year. What many people may not realize is that climate change is already one of the drivers behind those rising costs.
For many households, climate change is no longer just an environmental issue. It is becoming a cost-of-living issue. While climate impacts like melting glaciers and shrinking polar ice can feel distant from everyday life, the financial effects are already showing up in monthly budgets across the country.
Today, a larger share of household income is consumed by fixed costs such as housing, insurance, utilities, and healthcare. (3) Climate change and climate inaction are adding pressure to many of those expenses through higher disaster recovery costs, rising energy demand, infrastructure repairs, and increased insurance risk.
The goal of this article is to help connect climate change to the everyday financial realities people already experience. Regardless of where someone stands on climate policy, it is important to recognize that climate change is already increasing costs for households, businesses, and taxpayers across the United States.
More conservative estimates indicate that the average household has experienced an increase of about $400 per year from observed climate change, while less conservative estimates suggest an increase of $900.(1) Those in more disaster-prone regions of the country face disproportionate costs, with some households experiencing climate-related costs averaging $1,300 per year.(1) Another study found that climate adaptation costs driven by climate change have already consumed over 3% of personal income in the U.S. since 2015.(9) By the end of the century, housing units could spend an additional $5,600 on adaptation costs.(1)
Whether we realize it or not, Americans are already paying for climate change through higher insurance premiums, energy costs, taxes, and infrastructure repairs. These growing expenses are often referred to as climate adaptation costs.
Without meaningful climate action, these costs are expected to continue rising. Choosing not to invest in climate action is also choosing to spend more on climate adaptation.
Here are a few ways climate change is already increasing the cost of living:
- Higher insurance costs from more frequent and severe storms
- Higher energy use during longer and hotter summers
- Higher electricity rates tied to storm recovery and grid upgrades
- Higher government spending and taxpayer-funded disaster recovery costs
The real debate is not whether climate change costs money. Americans are already paying for it. The question is where we want those costs to go. Should we invest more in climate action to help reduce future climate adaptation costs, or continue paying growing recovery and adaptation expenses in everyday life?
How Climate Change Is Increasing Insurance Costs
There is one industry that closely tracks the financial impact of natural disasters: insurance. Insurance companies are focused on assessing risk, estimating damages, and collecting enough revenue to cover losses and remain financially stable.
Comparing the 20-year periods 1980–1999 and 2000–2019, climate-related disasters increased 83% globally from 3,656 events to 6,681 events. The average time between billion-dollar disasters dropped from 82 days during the 1980s to 16 days during the last 10 years, and in 2025 the average time between disasters fell to just 10 days. (6)
According to the reinsurance firm Munich Re, total economic losses from natural disasters in 2024 exceeded $320 billion globally, nearly 40% higher than the decade-long annual average. Average annual inflation-adjusted costs more than quadrupled from $22.6 billion per year in the 1980s to $102 billion per year in the 2010s. Costs increased further to an average of $153.2 billion annually during 2020–2024, representing another 50% increase over the 2010s. (6)
In the United States, billion-dollar weather and climate disasters have also increased significantly. The average number of billion-dollar disasters per year has grown from roughly three annually during the 1980s to 19 annually over the last decade. In 2023 and 2024, the U.S. recorded 28 and 27 billion-dollar disasters respectively, both setting new records. (6)
The growing impact of climate change is one reason insurance costs continue to rise. “There are two things that drive insurance loss costs, which is the frequency of events and how much they cost,” said Robert Passmore, assistant vice president of personal lines at the Property Casualty Insurers Association of America. “So, as these events become more frequent, that’s definitely going to have an impact.” (8)
After adjusting for inflation, insurance costs have steadily increased over time. From 2000 to 2020, insurance costs consistently grew faster than the Consumer Price Index due to rising rebuilding costs and weather-related losses.(3) Between 2020 and 2023 alone, the average home insurance premium increased from $75 to $360 due to climate change impacts, with disaster-prone regions experiencing especially steep increases.(1) Since 2015, homeowners in some regions affected by more extreme weather have seen home insurance costs increased by nearly 57%.(1) Some insurers have also limited or stopped offering coverage in high-risk areas.(7)
For many families, rising insurance costs are no longer occasional financial burdens. They are becoming recurring monthly expenses tied directly to growing climate risk.
How Rising Temperatures Increase Household Energy Costs
The financial impacts of climate change extend beyond insurance. Rising temperatures are also changing how much energy Americans use and how utilities plan for future electricity demand.
Between 1950 and 2010, per capita electricity use increased 10-fold, though usage has flattened or slightly declined since 2012 due to more efficient appliances and LED lighting. (3) A significant share of increased energy demand comes from cooling needs associated with higher temperatures.
Over the last 20 years, the United States has experienced increasing Cooling Degree Days (CDD) and decreasing Heating Degree Days (HDD). Nearly all counties have become warmer over the past three decades, with some areas experiencing several hundred additional cooling degree days, equivalent to roughly one additional degree of warmth on most days. (1) This trend reflects a warming climate where air conditioning demand is increasing while heating demand generally declines. (4)
As temperatures continue rising, households are expected to spend more on cooling than they save on heating. The U.S. Energy Information Administration (EIA) projects that by 2050, national Heating Degree Days will be 11% lower while Cooling Degree Days will be 28% higher than 2021 levels. Cooling demand is projected to rise 2.5 times faster than heating demand declines. (5)
These projections come from energy and infrastructure experts planning for future electricity demand and grid capacity needs. Utilities and grid operators are already preparing for higher peak summer electricity loads caused by rising temperatures. (5)
Longer and hotter summers also affect how homes and buildings are designed. Buildings constructed for past climate conditions may require upgrades such as larger air conditioning systems, stronger insulation, and improved ventilation to remain comfortable and energy efficient in the future. (10)
For many households, this means higher monthly utility bills and potentially higher long-term home improvement costs as temperatures continue to rise.
How Climate Change Affects Electricity Rates
On an inflation-adjusted basis, average U.S. residential electricity rates are slightly lower today than they were 50 years ago. (2) However, climate-related damage to utility infrastructure is creating new upward pressure on electricity costs.
Electric utilities rely heavily on above-ground poles, wires, transformers, and substations that can be damaged by hurricanes, storms, floods, and wildfires. Repairing and upgrading this infrastructure often requires substantial investment.
As a result, utilities are increasing electricity rates in response to wildfire and hurricane events to fund infrastructure repairs and future mitigation efforts. (1) The average cumulative increase in per-household electricity expenditures due to climate-related price changes is approximately $30. (1)
While this increase may appear modest today, utility costs are expected to rise further as climate-related infrastructure damage becomes more frequent and severe.
How Climate Disasters Increase Government Spending and Taxes
Extreme weather events also damage public infrastructure, including roads, schools, bridges, airports, water systems, and emergency services infrastructure. Recovery and rebuilding costs are often funded through taxpayer dollars at the federal, state, and local levels.
The average annual government cost tied to climate-related disaster recovery is estimated at nearly $142 per household. (1) States that frequently experience hurricanes, wildfires, tornadoes, or flooding can face even higher public recovery costs.
These expenses affect taxpayers whether they personally experience a disaster or not. Climate-related recovery spending can increase pressure on public budgets, emergency management systems, and infrastructure funding nationwide.
Reducing Climate Costs Through Climate Action
While this article focuses on the growing financial costs associated with climate change, the issue is not only about money for many people. It is also about recognizing our environmental impact and taking responsibility for reducing it in order to help preserve a healthy planet for future generations.
While individuals alone cannot solve climate change, collective action can help reduce future climate adaptation costs over time.
For those interested in taking action, there are three important steps:
- Estimate your carbon footprint to better understand the emissions connected to your lifestyle and activities.
- Create a plan to gradually reduce emissions through energy efficiency, cleaner technologies, and more sustainable choices.
- Address remaining emissions by supporting verified carbon reduction projects through carbon credits.
Carbon credits are one of the most cost-effective tools available for climate action because they help fund projects that generate verified emission reductions at scale. Supporting global emission reduction efforts can help reduce the long-term impacts and costs associated with climate change.
Visit Terrapass to learn more about carbon footprints, carbon credits, and climate action solutions.
The post How Climate Change Is Raising the Cost of Living appeared first on Terrapass.
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