US company Duke Energy and Chinese power producer China Huaneng Group teamed up to develop technology for clean coal and for the capture and storage greenhouse gases.
The Memorandum of Understanding (MOU) will include information exchange and exploration of long-term cooperative plans to develop renewable electricity sources and decrease coal plant emissions, Duke Energy said.
Duke Energy is currently building a 630MW coal gasification power station in Indiana, which is likely to go online in 2012.
The company is also investing $17m to study carbon capture at the site and proposing to spend $121m to study the potential capture and permanent underground storage of up to 60% of the plant's carbon dioxide emissions.
China Huaneng Group has built the first CO2 capturing demonstration facility in China and is building a bigger CO2 capturing facility in Shanghai that will become operational by the end of 2009.
The company is also responsible for a 250MW IGCC demonstration green coal-fired power station in Tianjin that will be completed in 2011.