The state of Queensland, Australia – a major coal-producing region – has pulled out of funding a flagship demonstration project to capture carbon dioxide emissions from a coal-fired power station and store them underground.

The ZeroGen project, which has already had around A$192 million (US$191 million) sunk into it by the state, was supposed to have built a new 530 MW coal-gasifer plant, to be in operation by 2015, and would have stored about 2 million tonnes of carbon dioxide per year at full capacity. (That would make it twice as large as the United States’ flagship demonstration plant, FutureGen). The entire project’s total cost, much of it intended to be borne by industry, was put at more than A$4.3 billion.

“We had hoped to have a clean coal power station up and running by 2015 but the fact is that the early research has shown us that this is not viable at this time on a commercial scale,” said Queensland premier Anna Bligh.

According to The Australian, Kelly Thambimuthu, who is chairman of the International Energy Agency’s greenhouse gas R&D programme, had resigned from ZeroGen last month because he felt government wasn’t incentivizing the area sufficiently. “It’s absolute nonsense for Queensland to export so much coal and make money from it and yet do nothing about reducing emissions,” he told the paper.

The same paper also asserts that state government balked after the cost of the project increased by more than half, though Bligh would not put a figure on the total, citing commercial confidentiality. She said the location of the plant was the key stumbling block. ZeroGen will now go it alone, becoming an entity owned and run by industry, Bligh said.