Carbon emissions from power plants, industrial processes and coal-based industries in the Victorian-based Latrobe Valley will be reduced from a state and federal carbon capture program.

The Victorian Government has developed a carbon capture and storage (CCS) project known as CarbonNet, being the second project selected for funding under the federal Carbon Capture and Storage Flagships Program.

Both state and federal governments will provide $100 million towards the project, with $30 million from the state government and $70 million from the Commonwealth.

Low emission brown coal electricity generation in the region will be demonstrated in feasibility work through the CarbonNet project worth more than $1 billion.

Federal Minister for Resources and Energy, Martin Ferguson said economic prosperity in the region will be secured through “clean energy innovation” that could help power stations cut their emissions.

“The economic base in the Latrobe Valley depends on brown coal and while the government is committed to cutting CO2 emissions, the last thing we want to do is cut jobs in the process,” Mr Ferguson said.

The CarbonNet project will be managed by the Victorian Department of Primary Industries, which will include work in modeling and testing potential storage sites for CO2.

The Gippsland Basin has been awarded an offshore tenement for CO2 storage site exploration, with state and federal governments giving the HRL Dual Gas project a six month extension to meet funding deed conditions.