India's Union Budget 2026 includes a ₹20,000 crore outlay for a carbon credit programme, leading to debate over its focus on heavy industries or farmers. Official documents link it to Carbon Capture, Utilisation, and Storage (CCUS) for hard-to-abate sectors, while some narratives highlight potential income for farmers through sustainable practices.
India's Union Budget 2026 announced a ₹20,000 crore outlay for a carbon credit programme, sparking confusion over its purpose. An op-ed in The Hindu notes that it anchors on the Department of Science and Technology (DST)'s 'R&D Roadmap for CCUS' released in December 2025. The roadmap targets 'hard-to-abate' industries like power, steel, cement, refineries, and chemicals, where process emissions are concentrated and challenging to eliminate via renewables alone. Agriculture is explicitly excluded from CCUS sectors, as its emissions—mainly methane and nitrous oxide—are diffuse and biologically mediated, unsuitable for point-source capture. The document distinguishes CCUS (preventing industrial emissions) from Carbon Dioxide Removal (CDR), where agriculture contributes through soil sequestration, biochar, and agroforestry. Despite this, media reports and social media portray it as enabling farmers to earn credits via regenerative practices, conflating it with voluntary carbon markets. The op-ed attributes confusion to the Budget's broad 'carbon credit programme' phrasing amid discussions on agricultural credits. Analyst Arkalgud N. Ganeshamurthy, a Fellow of the National Academy of Agricultural Sciences, urges the government to separate smokestack industries from soil-based efforts. The CCUS initiative is vital for decarbonising industry, responsible for a quarter of India's emissions, while agriculture offers parallel sequestration potential needing distinct policy.