The technology has been heavily promoted in recent months by its owners, MBD Energy, as potentially holding the key ''to rapid, large-scale'' reductions of carbon dioxide emissions from heavy-polluting coal- and gas-fired power stations. Experimental projects have already been announced for Eraring power station in NSW and Loy Yang in Victoria.

With the Opposition spokesman on energy, Ian Macfarlane, recently voicing doubts about so-called clean-coal technology, the ''algal synthesiser'' project is being embraced in some circles as a feasible alternative.

The managing director of MBD Energy, Andrew Lawson, said the idea of storing carbon dioxide from coal-fired plants by recycling it through algae or in the soil is a likely solution to the problem of carbon pollution from power stations, smelters and refineries.

The company's pilot project is recycling carbon emissions by using them to grow algae which can then be turned into plastics, biodiesel for transport and, more likely, animal feed. It has conducted a two-year trial with James Cook University in Queensland using a 5000-square-metre test site to try to produce 25,000 kilograms of algal animal feed and 14,000 litres of biodiesel for every 100 tonnes of emissions.

But the technology is at a very early stage of development and questions remain over whether it can be cost-effective, how much land is needed for a commercial operation and what long-term trials of the animal feed will show. Most important are questions about how much it will reduce carbon emissions.

Much of the carbon dioxide stored in the algae could end up being released back into the atmosphere if it is used to produce feed for cattle or biodiesel transport fuel.