Britain could save £5 billion ($6.64 billion) a year by 2050 if it invests now in technology to capture and store emissions underground, a government advisory body report said on Monday.
CCS, which traps emissions blamed for global warming during the burning of fossil fuels and stores them underground, had been regarded as too expensive by the government, which last year cancelled plans to spend up to £1 billion to help commercialize the technology.
But the report, by the Parliamentary Advisory Group on Carbon Capture and Storage, said that with government backing CCS could be deployed on power plants at a cost of £85 per megawatt hour (MWh), cheaper than the £92.50 MWh price guarantee given by the government to EDF's Hinkley C nuclear project.
"By 2050, CCS could be responsible for curbing as much as 40 percent of emissions, saving up to £5 billion annually compared to alternative strategies," the report said.
Britain has a legally binding target to cut emissions by 80 percent on 1990 levels by 2050.
So far CCS has failed to live up to early hopes of its widespread adoption. After many years of research Canadian utility Saskatchewan Power opened the world's first coal-fired power plant retrofitted with CCS in 2014, but European utilities have struggled.
The report said the government should set up a publicly-owned CCS Delivery Company, similar in concept to the Olympics Delivery Authority, and provide it with £200-300 million of funding over the next four to five years.
"We will need a range of technologies as we create a clean energy future, but above all, we must ensure they are affordable," a spokeswoman for Britain's Department for Business, Energy and Industrial Strategy said.
"The costs of Carbon Capture and Storage must come down if it is to play a part in the long-term decarbonisation of the UK's economy."