New Delhi, Feb. 12 -- MUMBAI/NEW DELHI: The Centre plans to financially support carbon capture technology for India's steel sector, betting on it as a practical way to cut emissions while protecting exports from the European Union's (EU) upcoming carbon tax.

The Union budget for FY27 has allocated Rs.20,000 crore for carbon capture, a move expected to benefit steelmakers the most. The government is positioning the scheme as a potential safeguard against the EU's Carbon Border Adjustment Mechanism (CBAM), which imposes extra taxes on carbon-intensive imports. CBAM came into effect on 1 January 2026.

In 2025, India exported 8.6 million tonnes of steel, with the European Union accounting for a little over 40% of those shipments, according ...