Japan to offer loans to foreign clean coal developers

Japan is poised to offer loans to power companies in the US and Australia which purchase clean coal systems from Japanese manufacturers.

According to local reports, the state-owned Japan Bank for International Co-operation is to provide the funding, which is intended to help boost sales of Integrated Gasification Combined Cycle (IGCC) technologies provided by Mitsubishi Heavy Industries and Hitachi supply plants.

The IGCC plants are touted as a cleaner alternative to conventional coal-fired plants. They work by converting coal into a synthetic gas from which particulate matter, mercury and sulphur is removed. The gas is then used to fuel a highly efficient combined cycle system where the gas powers a turbine generator before the waste heat is captured to power a second steam turbine system.

Advocates of the technology argue that it not only limits the release of particulate matter, but can also lead to net reductions in carbon emissions as a result of the improved efficiencies.

The bank may also offer loans for overseas projects that involve the purchase of Japanese-made technology to capture and store carbon emissions from the plants.

Mitsubishi Heavy Industries claims that carbon dioxide emissions from coal-fired plants could be reduced by up to 90 per cent through the combination of IGCC and carbon capture and storage technology

One of the first projects eligible for a loan under the scheme may be Australia's planned ZeroGen power plant in central Queensland.

Hirotoshi Kunitomo, head of the Japanese trade ministry’s coal division, said a loan would be considered for the plant if requested by the Queensland state government.

However, Queensland state officials played down the possibility, saying that while the government has been in talks with Mitsubishi, a deal has yet to be reached.

Japan's Nikkei newspaper reported that the ZeroGen plant has an estimated cost of $2.1bn (£1.3bn) with a targeted completion date of 2015. The project is to incorporate IGCC and carbon capture and storage capabilities with 530MW of generation capacity.