China could become a leader in the environmentally friendly use of coal as it is the only country currently committing large sums in developing a clean-coal pilot plant, according to a minority US shareholder in the project. Peabody Energy, the world's largest coal producer, is the sole foreign shareholder in the proposed clean-coal project known as GreenGen. It holds a 6 per cent stake in the company which is controlled by the country's largest power producer, China Huaneng Group, which has a 52 per cent shareholding. 'China is the only country that is putting hard money into a clean-coal demonstration project,' said Peabody senior vice-president of government relations Fredrick Palmer. 'It could well be taking the lead in this area.' In a major step towards combating carbon emissions, China's first carbon capture project, built in China Huaneng Group's power plant in Beijing using technology from Australia's Commonwealth Scientific and Industrial Research Organisation, came on stream in July. It can capture between 3,000 tonnes and 5,000 tonnes of carbon dioxide emitted by the 845-megawatt power plant every year. But that is only a small portion of the plant's carbon dioxide emissions and China Huaneng's GreenGen subsidiary is seeking approval to build a 250 MW plant - to be expanded to 1,450 MW later - together with facilities to capture over 90 per cent of the new plant's carbon emissions. Unlike the Beijing project which captures carbon dioxide after coal is burnt, the GreenGen project proposed for Tianjin will capture greenhouse gas before combustion, since carbon dioxide will be removed after coal is gasified. The captured gas would likely be injected into oil and gas fields in nearby Bohai Bay to increase production yields, Mr Palmer said. Approval of the US$1 billion project was expected soon and it was slated for completion by early 2011, he added. This is just over a year behind the original schedule of late 2009. GreenGen president Su Wenbin had said in April that the delay was because regulators had been mulling over its power price, whose lower project carbon emissions and higher construction costs meant it deserved a higher price. He also said China had an edge over similar projects in the United States and Europe that had been delayed by funding and planning problems, as the country's political climate allowed projects to be pushed ahead quickly. China Huaneng is hedging its bets on domestic clean-coal initiatives and is also part of FutureGen, a project initiated by the US Department of Energy aimed at building a 275 MW carbon capture pilot project in Illinois state, originally expected to be completed by 2012. The project is backed by the country's largest utility American Electric Power and international coal majors Peabody, Anglo American and BHP Billiton. But the department halted the project after deciding that its US$1.8 billion price tag was too costly. It was considering spreading its funding over a number of smaller projects using different technologies. One of the fund-seekers is Consortium for Clean Coal Utilisation, whose establishment was announced last week in Hong Kong by Washington University in St Louis. It will work with 24 universities worldwide to push advances in clean-coal technologies. The consortium received US$12 million of seed capital from corporate sponsors Peabody, Arch Coal and power producer Ameren - all based in St Louis, Illinois, near the largest coal-producing region in the US. President-elect Barack Obama looks set to jump-start the US carbon capture technology development. In his election campaign, he pledged to invest US$15 billion annually to bolster private sector efforts in developing clean energy. Given that the US depends on coal for half of its energy needs, clean-coal power's development will be a key part of the picture. China has an even higher coal dependency of close to 70 per cent. 'The International Energy Agency has projected that there will be a 45 per cent increase in global energy demand between this year and 2030,' said Arch Coal chairman Steven Leer. 'This means we will need to develop all energy sources to meet demand.' Still, analysts expect commercial viability of clean-coal projects to take the best part of the next decade to be reached.