The European Commission announced Wednesday that it would provide financing up to 50 million euros (70 million dollars) to help China build a coal-fired power plant equipped with new technology to give it near-zero emissions.

Europe deems the carbon capture and storage technology, which is in its infancy, to be a key factor in fighting climate change, and a demonstration plant would be particularly significant in China, which produces and uses a massive amount of coal.

China has become the world's biggest carbon dioxide emitter, ahead of the United States, and its coal-fired power plants are a major contributor.

"The joint efforts of the EU and China are key to the success of the post-2012 climate change negotiations in Copenhagen" in December, said EU External Relations Commissioner Benita Ferrero-Waldner.

"The fact that the EU is supporting the construction of a power plant equipped with this innovative technology in China is proof of our common goal to look way beyond Copenhagen and to prepare the ground for cleaner energy production based on coal worldwide," she added.

The European financing will be a fraction of the 300-500 million euros that the project in China is estimated to cost.

The EU cash will come from a 60-million-euro fund earmarked for cooperation with emerging economies on cleaner coal technologies and carbon capture and storage.

The EU also foresees a billion-euro investment as part of its economic relaunch plans to co-finance a dozen similar clean power station projects in Europe.

Poland is the European country most dependant on coal for its electricity but heavily polluting coal-fired plants are still used in a number of member states.

The commission admits that the technology has not been fully developed yet.

"The separate elements of capture, transport and storage of carbon dioxide have all been demonstrated, but integrating them into a complete CCS process and bringing costs down remain a challenge," it said in a statement.

The biggest CO2 storage projects that European companies are currently involved in are the Sleipner project in the North Sea (Statoil) and the In Salah project in Algeria (Statoil, BP and Sonatrach).

Both projects involve stripping carbon dioxide from natural gas, before the gas is sold, and storing it in underground geological formations.

The European Union has set itself the task of cutting its greenhous gas emissions by 20 percent by 2020.