The Coal Research Establishment (CRE), part of British Coal, believes it may have a technique for removing carbon dioxide - the main greenhouse gas - from 'clean coal' generating stations. Extraction would be very expensive but even with the technology fitted, the stations would generate electricity more cheaply than nuclear power.
But the CRE's request for pounds 140,000 to secure matching funds from the European Community to continue its research has been turned down by the Department of Trade and Industry, which spent pounds 100m last year on nuclear research and development.
According to Ian Summerfield, from the CRE's environment branch, 'CRE and British Coal are as far advanced in their thinking as anyone'.
Mr Summerfield believes it would be possible to extract carbon dioxide and pump it into depleted North Sea oil and gas wells at a cost some 42 per cent greater than the current cost of coal-fired electricity - 'which is still cheaper than nuclear power'.
When global warming first became a concern, several schemes were looked at to remove carbon dioxide and pump it into geological formations or sink it into the deep ocean. But all of them were prohibitively expensive.
According to Mr Summerfield, CRE decided to look at the problem and 'started off with a clean sheet of paper' to analyse the different extraction technologies. Their chosen system is to put in a 'membrane' which would remove the carbon dioxide.
Pumping carbon dioxide into depleted North Sea oil and gas fields would ensure that it was being contained in geological formations which had locked gas away from the environment for long periods of time. The North Sea has enough capacity to accommodate some 80 years of Britain's carbon dioxide output.
The advanced membrane separation methods, Mr Summerfield believes, could make the electricity only 35 per cent more expensive than at present, 'and as the technology matured, that could be reduced further'.
But the research is long-term and is unlikely to be supported by a privatised coal industry. He does not expect such removal equipment would be needed for a couple of decades. But although the research has to be done now, 'it's not the sort of thing a privatised British Coal can do'.