J-Power and Xstrata PLC have started a 206 million Australian dollar, or $137 million, project in Australia that will be the first in the world to use a low-emission coal-fired generating technology.
The technology may cut typical carbon dioxide emissions from coal-fired generation by about 90 percent.
Schlumberger Ltd., Mitsui & Co. and IHI Corp. are also in the group funding the venture in Queensland state, the Callide Oxyfuel Project said Friday in a statement. The 30-megawatt plant is due to start operating in 2011.
The federal and state governments are contributing A$85 million to the Callide project. The Japanese government and the Australian Coal Association are also providing money for the plant.
"This project will lay the foundation for the widespread deployment of low-emission coal technology so essential for Australian power generation and for the millions of people across the world relying on Australian coal," Australian Resources and Energy Minister Martin Ferguson said Friday in a separate statement.
The venture's oxyfuel technology involves burning coal in a mix of oxygen and recirculated waste gases, instead of air, resulting in higher concentrations of carbon dioxide that can be more easily captured from the exhaust gases.
The carbon waste is then liquefied and buried underground. The technology may cut carbon dioxide emissions from coal-fired generators by about 90 percent, the venture said.
The technology can be fitted at existing coal-fired generators instead of building a new low-emissions plant.
Australia, which plans to introduce emissions trading in 2010 to fight global warming, depends on coal for more than 80 percent of its power supplies.