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Samsung C&T, the construction and trading arm of South Korea’s largest conglomerate, is taking its first big step into the European power market, with a 15 per cent stake in a UK carbon capture and storage project.

In what could be an important boost for Britain’s troubled efforts to create a carbon capture industry, the Korean group will invest in the Don Valley power project in South Yorkshire, a centre of UK coal-fired electricity generation.

The venture is being developed by 2Co Energy, a company headed by former BP executive Lewis Gillies, and backed by US private equity group TPG.

Carbon capture and storage has long been hailed as the answer to efforts to cut emissions of carbon dioxide from the coal-fired power plants on which many economies depend.

It involves capturing carbon emissions and storing them deep below the ground or sea. Although parts of the process have been used for years in industries such as gas extraction, developing a commercially viable CCS system that can be fitted to power plants has proved more elusive.

A $1.25bn project backed by the Canadian government in the province of Saskatchewan is the most advanced so far, according to Bloomberg New Energy Finance’s “Race to First” report on leading large-scale CCS ventures.

2Co plans to start building a 650MW coal gasification power plant next year and start operating it from 2016, depending on whether it can get backing from the UK and the European Union.

Carbon dioxide emissions captured from the Yorkshire plant would be piped underground to the North Sea, where they would be used to help recover “hard to reach” oil and then stored beneath the seabed.

2Co Energy says if it goes ahead it could spark a cluster of new CCS projects in a region responsible for some 18 per cent of the UK’s annual carbon emissions.

Neither Samsung nor 2Co Energy disclosed the financial terms of their deal. 2Co Energy says the total cost of the CCS project, including its offshore component, is likely be up to £5bn.

Mr Gillies, 2Co Energy’s chief executive, said the deal with Samsung was a “major vote of confidence in the UK’s potential to lead the world in carbon capture and storage technology”.

The UK has long sought to play a big role in the emerging CCS industry and launched a competition to find a suitable developer in 2007.

The government agreed to invest up to £1bn in the winning project, which a consortium led by Scottish Power had planned to build in Longannet, Scotland.

But the venture collapsed late last year after the two sides failed to agree financial terms.

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