A WORLD-first demonstration of how the coal industry can dramatically reduce global warming has opened in Central Queensland.
The $200 million Callide Oxyfuel Project uses technology that enables carbon dioxixide (CO2) to be captured and stored deep beneath the earth.
It means existing coal-fired power stations can be adapted to produce almost zero emission electricity.
The Australian coal industry initially committed $67.9 million to the project and will commit another $9 million to it following the Australian Governments announcement of an extra $13 million to extend the demonstration phase of the project.
The Callide Power Station is located in the Callide Valley near Biloela in the Banana Shire of Central Queensland.
Currently the world's coal-fired power stations produce 11.4 billion tons of CO2 each year, and are the largest single contributors to global warming.
The Australian Coal Association's deputy chief executive officer Greg Sullivan says coal will continue to play a major role in energy generation.
"The World Resources Institute estimates that another 1,199 new coal-fired plants, with a total installed capacity of more than 1.4 million MW, are being proposed globally across 59 countries," Mr Sullivan says.
"Retrofitting the global, fossil-fuelled power station fleet will be essential if the world is to materially reduce its greenhouse gas trajectory."
Mr Sullivan says the Internation Energy Agency estimates broad deployment of carbon capture storage could deliver 20 % of the emissions reductions needed to stabilise C02 concentrations in the atmosphere and avoid the worst impacts of climate change by 2050.
"We note that a number of environmental NGOs around the world have recently backed CCS as a key component in the global effort on climate change," Mr Sullivan says.
"It is encouraging to see the debate begin to move away from a simplistic debate about so called good and bad fuels and towards a comprehensive suite of solutions including CCS alongside renewables."
The Callide Oxyfuel Project is a joint venture between CS Energy, Australian Coal Association Low Emission Technologies (ACALET), Xstrata Coal, Schlumberger, and Japanese participants, J-POWER, Mitsui & Co., Ltd., and IHI Corporation.
The project was awarded $50 million from the Australian Government under the Low Emissions Technology Demonstration Fund. The Callide Oxyfuel Project has also received financial support from the Queensland and Japanese Governments and technical support from JCOAL.