Energy: A technology competition that could save the planet

It's the technology that may do more than any other to save the planet - and Britain may be first to bring it on stream, Gordon Brown announced.

The Chancellor said the Government would launch a competition to build the world's first power station to use full-scale carbon capture and storage - known as CCS - a way of minimising the emissions of carbon dioxide, from fossil fuel burning, that are helping to cause climate change.

The technology involves trapping waste CO2 from power stations, liquefying it for transport and then pumping it into depleted North Sea oil and gas fields, deep in the seabed, where it would remain out of contact with the atmosphere. It is thought this could reduce carbon emissions from a given plant by up to 90 per cent.

Various bits of the technology have been tried and proven - the Norwegian company Statoil has successfully stored CO2 under the North Sea - but so far, no one has built an integrated plant which produces electricity, captures its emissions, transports them to a storage site and successfully sequesters them under the seabed. The competition is to build such a working plant, and the winner (or winners), to be announced next year, would be able to count on considerable government funding assistance.

Details were later given by the Trade and Industry Secretary, Alistair Darling, who has ultimate responsibility for energy. "Carbon capture and storage has massive potential to allow us to meet our energy needs at the same time as cutting carbon emissions. It opens up huge possibility, not just for Britain but also for the world," he said.

"Rapid deployment of CCS technology in growth economies such as China and India will be vital. This competition gives innovative UK industries the opportunity to become the leading exporters of CCS technology for the low carbon age."

Mr Brown unveiled several new green tax measures in his Budget. He announced that the climate change levy, which encourages energy saving by major industrial electricity users, would rise in line with inflation from April 2008.

He also announced rises in two more environmental taxes - the landfill tax, which is paid on waste going to rubbish dumps, and the aggregates levy, which is paid on sand, gravel and crushed rock.

Is CCS the world's only hope?

CCS has become the great hope of politicians and environmentalists wrestling with the threat of global warming. It is seen as the only solution to a phenomenon that will give climate change an enormous boost - the economic explosion in developing countries, led by China, powered by electricity produced in coal-fired plants. Over the next two decades China will build 600 coal-fired power stations, and by then it will have become the world's biggest greenhouse gas emitter. The Chinese are going to build these plants; only by fitting CCS technology to them could their emissions be mitigated. One senior British politician said recently: "If China does not take up CCS, we are all done for."