India’s Carbon Credit Plan Debate: CCUS vs Carbon Farming Explained (2026)

Source: TH

Context:

The Union Budget 2026 announced a ₹20,000 crore carbon credit programme based on the Department of Science and Technology (DST) CCUS roadmap.

However, this has created confusion between:

• Industrial decarbonisation (CCUS focus)
• Agricultural carbon credits (carbon farming narrative)

This debate highlights the need to clearly distinguish between emission reduction technologies and carbon removal strategies.

What is CCUS (Carbon Capture, Utilization, and Storage)?

CCUS is a technology-driven approach that captures carbon dioxide (CO₂) from industrial sources and either:

• Utilises it in industrial processes, or
• Stores it underground

It is mainly used in hard-to-abate sectors where emissions cannot be easily reduced through renewable energy.

Sectors Targeted Under CCUS

CCUS focuses on industries with concentrated emission sources:

• Power and refineries
• Steel and cement
• Chemicals

These sectors contribute significantly to India’s total emissions and require technological interventions.

Why Agriculture is Not Included in CCUS

Diffuse Emissions

Agricultural emissions are spread across large areas, unlike factory emissions from chimneys.

Biological Nature of Emissions

• Methane and nitrous oxide emissions are biologically generated
• Cannot be captured using mechanical systems like CCUS

Technological Mismatch

CCUS captures concentrated CO₂ streams, whereas agriculture focuses on absorbing atmospheric CO₂.

Strategic Distinction

• CCUS: Prevents new emissions (industrial mitigation)
• Carbon Farming (CDR): Removes existing CO₂ via natural processes

What is Carbon Farming?

Carbon farming refers to agricultural practices that increase carbon storage in soil and vegetation, contributing to Carbon Dioxide Removal (CDR).

Examples of Carbon Farming Practices

• Agroforestry
• Biochar application
• Conservation agriculture
• Soil organic carbon enhancement

Key Opportunities in India’s Carbon Strategy

Industrial Decarbonisation

• CCUS can help reduce emissions from sectors responsible for a large share of pollution
• ₹20,000 crore investment aims to scale these technologies

New Income Streams for Farmers

• Carbon credits can provide additional income
• Incentivises sustainable agricultural practices

Soil Carbon Sequestration

• India’s vast agricultural land can act as a carbon sink
• Enhances soil fertility and productivity

Growth of Carbon Markets

• Increasing demand for nature-based carbon credits
• Opportunities for private sector participation

Climate-Resilient Agriculture

• Supports sustainable farming practices
• Aligns with long-term environmental goals