UPDATE: Australia Carbon Capture Institute Funds First Projects

An Australian government-backed institute aiming to fast-track commercial-scale projects designed to capture greenhouse-gas emissions on Tuesday announced funding of around A$18 million for six projects.

The projects in Australia, the U.S., Romania and the Netherlands were chosen from a pool of over 50 submissions under the first round of applications to the Canberra-based Global Carbon Capture & Storage Institute.

They include two Australian projects, the Callide Oxyfuel project in Queensland state--which aims to capture carbon emissions at the Callide coal-fired power station--and CarbonNet in Victoria state's Latrobe Valley.

"The Australian government welcomes the ongoing efforts of the institute to promote the development of carbon capture and storage around the world," Australia's Energy Minister Martin Ferguson said in a statement.

"I am particularly pleased to see two Australian projects succeed in this first round of funding. It is further evidence that we remain at the forefront of CCS technology," he said.

The Global CCS institute was launched in April 2009 as a key plank of the center-left Labor government's strategy to green up the economy. Australia is the developed world's biggest per capita polluter because of its reliance on fossil fuels, mainly coal, for electricity generation.

Its aim is to help develop technologies that capture greenhouse gases and sequester them underground--a process that would potentially reduce the environmental impact of burning dirty fuels such as coal for power generation.

For heavily industrialized countries like Australia and the U.S., carbon capture and storage technologies offer a potential silver bullet that could allow them to reduce carbon emissions while also ensuring the continued viability of cheap fossil fuel-based electricity generation.

But the technology is not yet commercially viable and governments worldwide are allocating billions of dollars toward carbon capture and storage projects to help bridge a gap in commercial funding.

Other projects to win funding Tuesday are the Rotterdam CCS Network, Romanian CCS Demonstration Project, and the Tenaska Trailblazer Energy Center and Tenaska New Technologies/Entergy Corporation projects in the U.S.

Member countries of the Global CCS Institute include the U.S., Japan, Germany, France, South Korea, Canada, Italy and the U.K., while corporate backers include mining heavyweights BHP Billiton Ltd., Rio Tinto Ltd., StatoilHydro ASA, Toshiba Corp., Xstrata Coal Pty. Ltd., Mitsui & Co., Mitsubishi Corp. and General Electric Co.

-By Rachel Pannett, Dow Jones Newswires; 61-2-6208-0901; [e-mail]