German ministers have agreed on guidelines for the introduction of technology that prevents the release of carbon dioxide from power stations.

The draft legislation sets out a regulatory and technical framework for trial carbon capture and storage (CCS) projects, providing utilities with much-needed planning and investment guidelines, while setting environmental and public safety rules.

The German environment and economics ministries had argued for weeks over the rules, which cover the secure separation, transportation and storage of CO2 underground.

One of the most hotly debated stipulations is that German-based utilities will not be allowed to transfer responsibility to the state for their CO2 repositories until 30 years after the plant that produced the gas has closed.

Karl-Theodor zu Guttenberg, economics minister, described CCS as “a very important contribution towards climate protection and energy security” and said he hoped parliament would approve the bill by the summer.

The European Union has identified carbon capture as a key component in its effort to limit greenhouse gas emissions and avoid the worst effects of global warming.

In December, European leaders agreed to dedicate billions of euros in revenues from the EU emissions trading scheme to help fund the development of 10 to 12 carbon capture pilot plants.

Just last month, they opted to award another €1bn ($1.3bn, £917m) to five CCS projects as part of a broader economic recovery plan.

Several private energy and engineering companies, including Shell, Alstom, General Electric and Vattenfall, have given their enthusiastic backing to CCS in spite of complaints from critics that the technology has not been tested on an industrial scale and that government money would be better spent on energy efficiency projects.

Sigmar Gabriel, the German environment minister, argued on Wednesday that coal power plants would still have a future if they become less damaging to the environment and said critics were wrong to present CCS technology as a barrier to the development of renewable energy.

The total volume of EU CO2 emissions is capped, meaning that CCS technology will only be developed on a large scale if it turns out to cost less than the price of the carbon certificates that utilities are obliged to purchase.

Germany depends on coal for about half of its electricity needs and, in spite of big strides in renewable energy, this situation will be difficult to reverse quickly.

An agreement to phase out the country’s 17 nuclear reactors has prompted industry to warn of a looming energy gap.

It is, therefore, not surprising that Germany has taken a lead in CCS technology and is home to three pilot projects, including the world’s first operating CCS power plant, which was unveiled last year by Vattenfall, the Swedish utility.

RWE has set aside €1bn to build a bigger plant near Cologne, which is due to open in 2014, while Eon also plans to roll out the technology at a plant at Wilhelmshaven on the North Sea coast.

Berlin plans to review the first CCS trials in 2015 when it will decide whether to revise the environment standards.

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