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
DeBriefed 27 February 2026: Trump’s fossil-fuel talk | Modi-Lula rare-earth pact | Is there a UK ‘greenlash’?
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Absolute State of the Union
‘DRILL, BABY’: US president Donald Trump “doubled down on his ‘drill, baby, drill’ agenda” in his State of the Union (SOTU) address, said the Los Angeles Times. He “tout[ed] his support of the fossil-fuel industry and renew[ed] his focus on electricity affordability”, reported the Financial Times. Trump also attacked the “green new scam”, noted Carbon Brief’s SOTU tracker.
COAL REPRIEVE: Earlier in the week, the Trump administration had watered down limits on mercury pollution from coal-fired power plants, reported the Financial Times. It remains “unclear” if this will be enough to prevent the decline of coal power, said Bloomberg, in the face of lower-cost gas and renewables. Reuters noted that US coal plants are “ageing”.
OIL STAY: The US Supreme Court agreed to hear arguments brought by the oil industry in a “major lawsuit”, reported the New York Times. The newspaper said the firms are attempting to head off dozens of other lawsuits at state level, relating to their role in global warming.
SHIP-SHILLING: The Trump administration is working to “kill” a global carbon levy on shipping “permanently”, reported Politico, after succeeding in delaying the measure late last year. The Guardian said US “bullying” could be “paying off”, after Panama signalled it was reversing its support for the levy in a proposal submitted to the UN shipping body.
Around the world
- RARE EARTHS: The governments of Brazil and India signed a deal on rare earths, said the Times of India, as well as agreeing to collaborate on renewable energy.
- HEAT ROLLBACK: German homes will be allowed to continue installing gas and oil heating, under watered-down government plans covered by Clean Energy Wire.
- BRAZIL FLOODS: At least 53 people died in floods in the state of Minas Gerais, after some areas saw 170mm of rain in a few hours, reported CNN Brasil.
- ITALY’S ATTACK: Italy is calling for the EU to “suspend” its emissions trading system (ETS) ahead of a review later this year, said Politico.
- COOKSTOVE CREDITS: The first-ever carbon credits under the Paris Agreement have been issued to a cookstove project in Myanmar, said Climate Home News.
- SAUDI SOLAR: Turkey has signed a “major” solar deal that will see Saudi firm ACWA building 2 gigawatts in the country, according to Agence France-Presse.
$467 billion
The profits made by five major oil firms since prices spiked following Russia’s invasion of Ukraine four years ago, according to a report by Global Witness covered by BusinessGreen.
Latest climate research
- Claims about the “fingerprint” of human-caused climate change, made in a recent US Department of Energy report, are “factually incorrect” | AGU Advances
- Large lakes in the Congo Basin are releasing carbon dioxide into the atmosphere from “immense ancient stores” | Nature Geoscience
- Shared Socioeconomic Pathways – scenarios used regularly in climate modelling – underrepresent “narratives explicitly centring on democratic principles such as participation, accountability and justice” | npj Climate Action
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
The constituency of Richard Tice MP, the climate-sceptic deputy leader of Reform UK, is the second-largest recipient of flood defence spending in England, according to new Carbon Brief analysis. Overall, the funding is disproportionately targeted at coastal and urban areas, many of which have Conservative or Liberal Democrat MPs.
Spotlight
Is there really a UK ‘greenlash’?
This week, after a historic Green Party byelection win, Carbon Brief looks at whether there really is a “greenlash” against climate policy in the UK.
Over the past year, the UK’s political consensus on climate change has been shattered.
Yet despite a sharp turn against climate action among right-wing politicians and right-leaning media outlets, UK public support for climate action remains strong.
Prof Federica Genovese, who studies climate politics at the University of Oxford, told Carbon Brief:
“The current ‘war’ on green policy is mostly driven by media and political elites, not by the public.”
Indeed, there is still a greater than two-to-one majority among the UK public in favour of the country’s legally binding target to reach net-zero emissions by 2050, as shown below.
Steve Akehurst, director of public-opinion research initiative Persuasion UK, also noted the growing divide between the public and “elites”. He told Carbon Brief:
“The biggest movement is, without doubt, in media and elite opinion. There is a bit more polarisation and opposition [to climate action] among voters, but it’s typically no more than 20-25% and mostly confined within core Reform voters.”
Conservative gear shift
For decades, the UK had enjoyed strong, cross-party political support for climate action.
Lord Deben, the Conservative peer and former chair of the Climate Change Committee, told Carbon Brief that the UK’s landmark 2008 Climate Change Act had been born of this cross-party consensus, saying “all parties supported it”.
Since their landslide loss at the 2024 election, however, the Conservatives have turned against the UK’s target of net-zero emissions by 2050, which they legislated for in 2019.
Curiously, while opposition to net-zero has surged among Conservative MPs, there is majority support for the target among those that plan to vote for the party, as shown below.
Dr Adam Corner, advisor to the Climate Barometer initiative that tracks public opinion on climate change, told Carbon Brief that those who currently plan to vote Reform are the only segment who “tend to be more opposed to net-zero goals”. He said:
“Despite the rise in hostile media coverage and the collapse of the political consensus, we find that public support for the net-zero by 2050 target is plateauing – not plummeting.”
Reform, which rejects the scientific evidence on global warming and campaigns against net-zero, has been leading the polls for a year. (However, it was comfortably beaten by the Greens in yesterday’s Gorton and Denton byelection.)
Corner acknowledged that “some of the anti-net zero noise…[is] showing up in our data”, adding:
“We see rising concerns about the near-term costs of policies and an uptick in people [falsely] attributing high energy bills to climate initiatives.”
But Akehurst said that, rather than a big fall in public support, there had been a drop in the “salience” of climate action:
“So many other issues [are] competing for their attention.”
UK newspapers published more editorials opposing climate action than supporting it for the first time on record in 2025, according to Carbon Brief analysis.
Global ‘greenlash’?
All of this sits against a challenging global backdrop, in which US president Donald Trump has been repeating climate-sceptic talking points and rolling back related policy.
At the same time, prominent figures have been calling for a change in climate strategy, sold variously as a “reset”, a “pivot”, as “realism”, or as “pragmatism”.
Genovese said that “far-right leaders have succeeded in the past 10 years in capturing net-zero as a poster child of things they are ‘fighting against’”.
She added that “much of this is fodder for conservative media and this whole ecosystem is essentially driving what we call the ‘greenlash’”.
Corner said the “disconnect” between elite views and the wider public “can create problems” – for example, “MPs consistently underestimate support for renewables”. He added:
“There is clearly a risk that the public starts to disengage too, if not enough positive voices are countering the negative ones.”
Watch, read, listen
TRUMP’S ‘PETROSTATE’: The US is becoming a “petrostate” that will be “sicker and poorer”, wrote Financial Times associate editor Rana Forohaar.
RHETORIC VS REALITY: Despite a “political mood [that] has darkened”, there is “more green stuff being installed than ever”, said New York Times columnist David Wallace-Wells.
CHINA’S ‘REVOLUTION’: The BBC’s Climate Question podcast reported from China on the “green energy revolution” taking place in the country.
Coming up
- 2-6 March: UN Food and Agriculture Organization regional conference for Latin America and Caribbean, Brasília
- 3 March: UK spring statement
- 4-11 March: China’s “two sessions”
- 5 March: Nepal elections
Pick of the jobs
- The Guardian, senior reporter, climate justice | Salary: $123,000-$135,000. Location: New York or Washington DC
- China-Global South Project, non-resident fellow, climate change | Salary: Up to $1,000 a month. Location: Remote
- University of East Anglia, PhD in mobilising community-based climate action through co-designed sports and wellbeing interventions | Salary: Stipend (unknown amount). Location: Norwich, UK
- TABLE and the University of São Paulo, Brazil, postdoctoral researcher in food system narratives | Salary: Unknown. Location: Pirassununga, Brazil
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 27 February 2026: Trump’s fossil-fuel talk | Modi-Lula rare-earth pact | Is there a UK ‘greenlash’? appeared first on Carbon Brief.
Seven Pacific island nations say they will demand heftier levies on global shipping emissions if opponents of a green deal for the industry succeed in reopening negotiations on the stalled accord.
The United States and Saudi Arabia persuaded countries not to grant final approval to the International Maritime Organization’s Net-Zero Framework (NZF) in October and they are now leading a drive for changes to the deal.
In a joint submission seen by Climate Home News, the seven climate-vulnerable Pacific countries said the framework was already a “fragile compromise”, and vowed to push for a universal levy on all ship emissions, as well as higher fees . The deal currently stipulates that fees will be charged when a vessel’s emissions exceed a certain level.
“For many countries, the NZF represents the absolute limit of what they can accept,” said the unpublished submission by Fiji, Kiribati, Vanuatu, Nauru, Palau, Tuvalu and the Solomon Islands.
The countries said a universal levy and higher charges on shipping would raise more funds to enable a “just and equitable transition leaving no country behind”. They added, however, that “despite its many shortcomings”, the framework should be adopted later this year.
US allies want exemption for ‘transition fuels’
The previous attempt to adopt the framework failed after governments narrowly voted to postpone it by a year. Ahead of the vote, the US threatened governments and their officials with sanctions, tariffs and visa restrictions – and President Donald Trump called the framework a “Green New Scam Tax on Shipping”.
Since then, Liberia – an African nation with a major low-tax shipping registry headquartered in the US state of Virginia – has proposed a new measure under which, rather than staying fixed under the NZF, ships’ emissions intensity targets change depending on “demonstrated uptake” of both “low-carbon and zero-carbon fuels”.
The proposal places stringent conditions on what fuels are taken into consideration when setting these targets, stressing that the low- and zero-carbon fuels should be “scalable”, not cost more than 15% more than standard marine fuels and should be available at “sufficient ports worldwide”.
This proposal would not “penalise transitional fuels” like natural gas and biofuels, they said. In the last decade, the US has built a host of large liquefied natural gas (LNG) export terminals, which the Trump administration is lobbying other countries to purchase from.
The draft motion, seen by Climate Home News, was co-sponsored by US ally Argentina and also by Panama, a shipping hub whose canal the US has threatened to annex. Both countries voted with the US to postpone the last vote on adopting the framework.
-
IMO head: Shipping decarbonisation “has started” despite green deal delay
Arsenio Dominguez said the shipping industry’s net zero emissions goal is not in dispute although countries have stalled on adopting a framework to reach it -
US-led alliance wins a year’s delay in adoption of green shipping deal
The IMO’s Net-Zero Framework will be up for approval again in October 2026, after the US and Saudi Arabia persuaded countries not to vote on it as planned
The IMO’s Panamanian head Arsenio Dominguez told reporters in January that changes to the framework were now possible.
“It is clear from what happened last year that we need to look into the concerns that have been expressed [and] … make sure that they are somehow addressed within the framework,” he said.
Patchwork of levies
While the European Union pushed firmly for the framework’s adoption, two of its shipping-reliant member states – Greece and Cyprus – abstained in October’s vote.
After a meeting between the Greek shipping minister and Saudi Arabia’s energy minister in January, Greece said a “common position” united Greece, Saudi Arabia and the US on the framework.
If the NZF or a similar instrument is not adopted, the IMO has warned that there will be a patchwork of differing regional levies on pollution – like the EU’s emissions trading system for ships visiting its ports – which will be complicated and expensive to comply with.
This would mean that only countries with their own levies and with lots of ships visiting their ports would raise funds, making it harder for other nations to fund green investments in their ports, seafarers and shipping companies. In contrast, under the NZF, revenues would be disbursed by the IMO to all nations based on set criteria.
Anais Rios, shipping policy officer from green campaign group Seas At Risk, told Climate Home News the proposal by the Pacific nations for a levy on all shipping emissions – not just those above a certain threshold – was “the most credible way to meet the IMO’s climate goals”.
“With geopolitics reframing climate policy, asking the IMO to reopen the discussion on the universal levy is the only way to decarbonise shipping whilst bringing revenue to manage impacts fairly,” Rios said.
“It is […] far stronger than the Net-Zero Framework that is currently on offer.”
The post Pacific nations want higher emissions charges if shipping talks reopen appeared first on Climate Home News.
Pacific nations want higher emissions charges if shipping talks reopen
Doubts over whether governments will maintain ambitious targets on boosting the use of sustainable aviation fuel (SAF) are a threat to the industry’s growth and play into the hands of fossil fuel companies, investors warned this week.
Several executives from airlines and oil firms have forecast recently that SAF requirements in the European Union, United Kingdom and elsewhere will be eased or scrapped altogether, potentially upending the aviation industry’s main policy to shrink air travel’s growing carbon footprint.
Such speculation poses a “fundamental threat” to the SAF industry, which mainly produces an alternative to traditional kerosene jet fuel using organic feedstocks such as used cooking oil (UCO), Thomas Engelmann, head of energy transition at German investment manager KGAL, told the Sustainable Aviation Fuel Investor conference in London.
He said fossil fuel firms would be the only winners from questions about compulsory SAF blending requirements.
The EU and the UK introduced the world’s first SAF mandates in January 2025, requiring fuel suppliers to blend at least 2% SAF with fossil fuel kerosene. The blending requirement will gradually increase to reach 32% in the EU and 22% in the UK by 2040.
Another case of diluted green rules?
Speaking at the World Economic Forum in Davos in January, CEO of French oil and gas company TotalEnergies Patrick Pouyanné said he would bet “that what happened to the car regulation will happen to the SAF regulation in Europe”.
The EU watered down green rules for car-makers in March 2025 after lobbying from car companies, Germany and Italy.
“You will see. Today all the airline companies are fighting [against the EU’s 2030 SAF target of 6%],” Pouyanne said, even though it’s “easy to reach to be honest”.
While most European airline lobbies publicly support the mandates, Ryanair Group CEO Michael O’Leary said last year that the SAF is “nonsense” and is “gradually dying a death, which is what it deserves to do”.
EU and UK stand by SAF targets
But the EU and the British government have disputed that. EU transport commissioner Apostolos Tzitzikostas said in November that the EU’s targets are “stable”, warning that “investment decisions and construction must start by 2027, or we will miss the 2030 targets”.
UK aviation minister Keir Mather told this week’s investor event that meeting the country’s SAF blending requirement of 10% by 2030 was “ambitious but, with the right investment, the right innovation and the right outlook, it is absolutely within our reach”.
“We need to go further and we need to go faster,” Mather said.
SAF investors and developers said such certainty on SAF mandates from policymakers was key to drawing the necessary investment to ramp up production of the greener fuel, which needs to scale up in order to bring down high production costs. Currently, SAF is between two and seven times more expensive than traditional jet fuel.
Urbano Perez, global clean molecules lead at Spanish bank Santander, said banks will not invest if there is a perceived regulatory risk.
David Scott, chair of Australian SAF producer Jet Zero Australia, said developing SAF was already challenging due to the risks of “pretty new” technology requiring high capital expenditure.
“That’s a scary model with a volatile political environment, so mandate questioning creates this problem on steroids”, Scott said.
Others played down the risk. Glenn Morgan, partner at investment and advisory firm SkiesFifty, said “policy is always a risk”, adding that traditional oil-based jet fuel could also lose subsidies.
Asian countries join SAF mandate adopters
In Asia, Singapore, South Korea, Thailand and Japan have recently adopted SAF mandates, and Matti Lievonen, CEO of Asia-based SAF producer EcoCeres, predicted that China, Indonesia and Hong Kong would follow suit.
David Fisken, investment director at the Australian Trade and Investment Commission, said the Australian government, which does not have a mandate, was watching to see how the EU and UK’s requirements played out.
The US does not have a SAF mandate and under President Donald Trump the government has slashed tax credits available for SAF producers from $1.75 a gallon to $1.
Is the world’s big idea for greener air travel a flight of fancy?
SAF and energy security
SAF’s potential role in boosting energy security was a major theme of this week’s discussions as geopolitical tensions push the issue to the fore.
Marcella Franchi, chief commercial officer for SAF at France’s Haffner Energy, said the Canadian government, which has “very unsettling neighbours at the moment”, was looking to produce SAF to protect its energy security, especially as it has ample supplies of biomass to use as potential feedstock.
Similarly, German weapons manufacturer Rheinmetall said last year it was working on plans that would enable European armed forces to produce their own synthetic, carbon-neutral fuel “locally and independently of global fossil fuel supply chain”.
Scott said Australia needs SAF to improve its fuel security, as it imports almost 99% of its liquid fuels.
He added that support for Australian SAF production is bipartisan, in part because it appeals to those more concerned about energy security than tackling climate change.
The post Doubts over European SAF rules threaten cleaner aviation hopes, investors warn appeared first on Climate Home News.
Doubts over European SAF rules threaten cleaner aviation hopes, investors warn
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