Drax is working with BOC Group and Alstom SA in a consortium called Capture Power to build a new 426MW coal-fired plant fitted with CCS technology in Yorkshire, Britain.

Through the project, carbon dioxide emissions from power stations and heavy industry will be siphoned off from the new power station and stored in undersea rock formations.

The Commission has deemed CCS technology essential if Europe is to meet targets to cut emissions by at least 80% below 1990 levels by mid-century.

In 2009, the European Union launched NER 300, a financing instrument jointly managed by the Commission, the European Investment Bank and member states to finance up to half the cost of at least eight demonstration CCS plants across Europe through the sale of 300 million carbon permits.

However, the EU has so far been unsuccessful in finding a CCS project to fund as all candidate plants have either pulled out or were deemed ineligible after member states were unable to promise financial backing.

The White Rose project only becamse eligible after Britain threw its support behind the plan. Although no financial guarantees were promised, Chris Davies, a British Liberal member of the European Parliament who steered the law guaranteeing the subsidy through the Parliament told Reuters that the support was enough to reassure the Commission that the project is economically sustainable.

If the project wins the funding, which will be announced in June, it could become Europe's first CCS plant.

Full-scale CCS plants at power stations are estimated to cost upwards of 1 billion Euros to construct.