A $200 million carbon capture plant has opened in central Queensland near Biloela. The facility, opened by Energy Minister Martin Ferguson on Saturday, is the first in the world to be retro-fitted on to an existing power station.

The Callide OxyFuel Project is a joint venture between the Japanese and Australian governments and several industry groups.

It uses a process called oxyfuel, which burns coal with pure oxygen instead of air, which contains 78 per cent nitrogen

The Australian Coal Association says the technology can reduce carbon emissions from coal-fired electricity plants by up to 90 per cent.

The project is expected to run well into 2014.