While significant work has been done worldwide on injecting CO2 into geological structures such as saline aquifers and oil and gas wells, researchers at the University of Queensland have spent the past 10 years concentrating on injecting CO2 into coal seams.

According to UQ Engineering Professor Victor Rudolph, coal seams offer several significant advantages. For one, coal seams are relatively shallow so compression energy is quite low, and two, the risk of the CO2 escaping is low due to the binding energy between coal and CO2.

And UQ's researchers feel the future of the technology lies in China.

"It makes sense to use this technology in China because it is cheaper by more than a third to carry out the project compared to Australia," Rudolph said.

"Where you get the CO2 out of the atmosphere is not important, where you bury the CO2 doesn't really matter - the fact is it is the same CO2 that affects everybody. To do it where it is cheapest makes logical sense."

He estimated a trial in Australia, involving an injection well with five extraction wells around it, would cost $A20 million. In China it would cost $12 million.

Dr Paul Massarotto, a principal research fellow in Energy and Environment with UQ's School of Engineering, agrees.

"We believe the world's economy would be better off by financing commercial CO2 geosequestration projects in developing countries like China, where capital and operating costs per tonne of CO2 sequestered are only 60 percent of the costs in Australia, Europe and North America," he said.

"We have done the numbers for a pilot project to be located in China, showing 40 percent cost reductions are indeed achievable today, with big savings for drilling and CO2 costs and good returns for extra methane which is produced as a by-product of the CO2 geosequestration process.

"By starting early testing of the coal-based CO2 geosequestration technology developed at UQ, and with strong financial support from international institutions and industry, the full commercialisation of this technology in China could be as near as five to 10 years away."

China currently builds 100 coal-fired power plants a year, which will discharge as much greenhouse gas as Australia's entire annual emissions. China recently passed the USA as the largest greenhouse gas emitting country in the world.

"The best way forward for China and the world is to attack CO2 emissions where costs per tonne of reduction are the lowest in the world," Massarotto said.

"This approach will be a win-win for both the developing countries and the industrialised developed world."

Work has already begun on the project with a UQ team holding seminars in XuZhou, Jiaosuo, JinCheng and Xi'an during June this year, with collaborating academics from China University of Mining and Technology and Xi'an Jiaotong University, and with commercial Chinese CBM companies.

The UQ and Chinese academic research collaborators have agreed to start developing an action plan around this vision, including plans for the first pilot project, probably to be located in the central China coal-rich provinces of Shanxi or Henan.

Rudolph said Shanxi and Henan coal was ideally suited to geosequestration and the provinces also contained the ideal universities to work with on such a project.

The pilot project, and full-scale commercial projects, would work around pre-drained seams where there is already infrastructure in place. In some cases, the injection can also push extra methane out that has not been captured from primary drainage - giving an added commercial bonus.

There are some mountainous obstacles to overcome before commercialisation though.

"There are two issues at stake, one is persuading the international community that China is the right place to do it," Rudolph said.

"The second issue is persuading China to do it. That relates not so much to the necessity but to the timing. The Chinese Government is currently almost entirely focused on getting CBM for the gas to meet the energy demands of the country. Getting rid of CO2 is a secondary problem.

"To persuade companies they need to be given a financial incentive. It is the same problem here in Australia - it either has to be mandated or commercially driven."

Rudolph also pointed out that removing CO2 through geosequestration is not recognised in the Kyoto Protocol, which would have to be modified if an international carbon trade market was put in place.

"There are a few steps along the way that need to be got right," he said.

"The international trading scheme is going to take the time it takes, getting incentives in place to get rid of CO2 is going to take some time as well, but nevertheless people need to start doing demonstration projects quickly and early in order to develop confidence that this is the correct way to go."