Located on the site of the existing Schwarze Pumpe power station in eastern Germany, Sweden's Vattenfall said the new technology has the potential to allow coal to be burnt without releasing harmful greenhouse gases.

"Today industrial history is being written," Vattenfall Europe's chief executive Tuomo Hatakka told a news conference.

"Coal has a future, we are convinced of that, but the carbon dioxide emissions from it have no future."

After first burning the coal, or in this case lignite, in pure oxygen -- itself a new method -- Vattenfall captures the carbon dioxide released using a technology called Carbon Capture and Storage, or CCS.

This involves compressing the gas, transporting it away in liquid form and sending it deep underground where it is safely sealed away, either in depleted gas or oil fields or in underground cavities full of saltwater.

Capturing the gases prevents them escaping into the Earth's atmosphere and contributing to global warming.

In the case of the pilot plant outside Spremberg close to the Polish border, the liquid carbon dioxide is taken 350 kilometres (210 miles) in lorries and injected "for permanent storage" into an empty gas field in northern Germany.

With around two-thirds of the world's power generated by burning fossil fuels and humanity set to rely heavily on these "for the foreseeable future," Vattenfall says the new technology is the way forward.

But environmental groups, which staged a small demonstration outside the plant on Thursday as some 400 guests arrived for the inauguration ceremony, said the technology would never catch on.

Germany's BUND pressure group slammed CCS as a "fig leaf" allowing new coal-fired power stations that chuck out millions of tonnes of carbon dioxide to be built while giving the appearance of addressing global warming.

"Vattenfall managers talk a lot about supposedly environmentally friendly coal power stations but they are still planning and building conventional coal-fired power stations with high levels of CO2 emissions," BUND's energy spokesman Thorben Becker said.

Greenpeace said that CCS decreases the amount of energy produced by coal-fired plants by 10 to 40 percent, meaning a much greater amount of coal must be burnt to produce the same amount of energy.

But the World Wide Fund for Nature was more forgiving, believing CCS "can serve as a technological bridge" until a better alternative is developed, WWF climate expert Regine Guenther told the Berlin daily Tageszeitung.

Vattenfall admitted that the technology has some way to go, not least with regard to its high cost, but also in terms of the infrastructure needed to transport and store the captured carbon dioxide.

At the pilot project around four trucks will be needed to take away the 240 tonnes of gas produced every day, and if CCS was applied on a large scale, the volume produced would mean that pipelines would need to be built, Vattenfall's vice-president for research Lars Stroemberg said.

The firm insisted that storing the gas was safe, however, saying underground reservoirs of carbon dioxide already occur naturally in geological formations where it has been trapped by sedimentary rocks in much the same way as oil or gas.

"There is much more storage capacity than will ever be needed," Stroemberg said.

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