Spremberg, Germany  - An electricity plant that burns lignite coal but does not pollute the atmosphere with carbon dioxide was billed Tuesday in Germany as the future of coal power.

The utility Vattenfall built the pilot plant on the Schwarze Pumpe Industrial Estate at Spremberg near Germany's Polish border. It burns lignite dust mixed with pure oxygen, then captures the resulting carbon dioxide to be buried in deep rock.

"Coal has a future, but emissions of carbon dioxide don't," said Tuomo Hatakka, chief executive of the Swedish-based utility's German unit, Vattenfall Europe, just before Tuesday's commissioning of the experimental plant.

Vattenfall describes its carbon capture and storage (CCS) plant as a world first in the lignite industry. Lignite or brown coal is cheap to mine, but is often criticized as a dirtier fuel than hard coal.

However environmentalists have slammed Vattenfall's oxyfuel technology, saying it uses vast amounts of energy to obtain the necessary oxygen and then to process the carbon-dioxide exhaust.

Protesters chanted and held up banners outside the 70-million-euro (100-million-dollar) plant and demanded Vattenfall shift to renewable energy such as solar and wind power instead.

The CCS process produces an exhaust gas that is more than 90 per cent carbon dioxide, but it yields 10 per cent less energy from the same tonnage of lignite than conventional plants do, experts say.

Carbon dioxide sequestration in porous rock more than a kilometre under the surface is seen as a way to keep that greenhouse gas out of the earth's atmosphere and reduce the man-made effects that are contributing to global warming.

The 30-megawatt pilot plant at Schwarze Pumpe is intended to test the technology.

Vattenfall plans to build two "demonstration plants" 10 times that size in Germany and Denmark by 2015 at the latest. Hatakka said earlier the company aimed to commission its first "large-scale CCS power station" in 2020. (dpa)