The gas separation technology can be fitted to existing power stations and petrochemical plants to produce hydrogen and capture carbon dioxide.

The project will be partially funded by the Queensland Government, which announced Wednesday it would contribute $1.05 million under its Smart State National and International Research Alliances program.

Scientists from the Australian Research Council's (ARC) Centre for Functional Nanomaterials, at the University of Queensland, and a German industrial research institute, Forschungszentrum Jülich (FZJ), will apply the technology by pumping synthesis gas from coal through a metal-supported molecular sieve in a pressurised chamber.

ARC Centre for Functional Nanomaterials director Professor Max Lu said the nano-sieve was coated with a thin film of zirconium and titanium oxides, which separated hydrogen from greenhouse gases such as carbon dioxide.

“The film we coat it in behaves like the sieve which has tiny nano-holes, one billionth of a metre, that allow the smaller hydrogen molecules to go through,” Lu said.

“It will turn dirty coal use clean and leave hydrogen that can be used in many other sectors such as transportation using fuel cells.”

Water would be the only by-product for coal power stations using the sieves as the carbon dioxide could be buried and hydrogen converted into electricity in fuel cells.

The research is also supported by UQ; the Centre for Low Emission Technology, which is backed by Queensland power and mining companies; and FZJ, the German state of North Rhine Westphalia and German industrial partners.

Project manager Dr Joe da Costa said UQ's molecular sieve technology was cheaper and had superior engineering performance compared to conventional gas separation technologies.