Coal-gasification company Linc Energy said this week it has formed a joint venture with biotech startup BioCleanCoal to develop a technology that converts carbon dioxide into oxygen and solid biomass.

The companies, both based in Australia, said they are developing a prototype to test on a site in the Australian town of Chinchilla, where Linc Energy is building a facility to gasify coal and convert it into liquid fuel.

Linc, which owns 60 percent of the joint venture, will spend $1 million to develop the prototype.

BioCleanCoal is using a technology developed by Malcolm Lamont, who owns intellectual-property firm Star Biotechnology, that can make different organisms' DNA rewrite its own coding -- without genetic engineering, said Hamish Macdonald, a company director.

The technology already is being used by sister companies Bio Adapt International and BioFuelGenomics to increase the yields of trees, for pulp and paper, and of other plants, for biofuels.

Lamont, chief scientist at BioCleanCoal, said the opportunity is enormous.

"At the moment, about 9 billion tons of CO2 is produced from coal-fired power stations per year," he said, adding that the use of coal is likely to grow as Kyoto requirements -- and carbon-emission trading that has reached prices of $27 per ton in Europe -- make emissions more expensive.

Macdonald said the company developed the technology about eight years ago, and Lamont said an independent, seven-year-long verification process found no detrimental effects.

The technology could potentially remove all the carbon-dioxide emissions from the process, Macdonald said.

He added that he doubts if 100-percent removal will ever happen because of the cost, but said taking out 90 percent or more might be doable.

The percentage will be determined by the size of the bioreactor, and the joint venture is still working to determine how much carbon dioxide it can remove at what engineering cost, he said.

"We're very confident we're going to be able to make a significant impact on emissions," Lamont said.

Linc Energy hasn't decided what to do with the biomass yet, but the company could feed it back into the system for energy, make biodiesel with it or turn it into fertilizer, among other options, Macdonald said.

After the prototype is completed, the joint venture will look into building a full-scale version, which might cost $30 million to $40 million, Macdonald estimated.

The team also will work on removing other emissions, such as sulfur, he said.

Then, the team plans to expand into additional applications, including food crops -- which Lamont said would be next on the list -- and health care.

The company also is working on ways to get trees and plants to grow in toxic or salt-affected land, which could play a large role in helping the planet cope with climate change, Macdonald said.

"In the tree population, as we see climate change the environment, most things can't cope and [instead] die," he said. "But a lot of organisms, using DNA, will figure out the coding they need to survive."

Instead of just allowing natural evolution to take place over millions of years, the company is able to bring on the evolution in four to 12 months, he said.

Other companies are taking different approaches to use greenhouse-gas emissions for fuel. GreenFuel Technologies Corp. is developing a way to use algae to turn carbon-dioxide emissions into biofuel, and Novomer claims its technology can turn carbon-dioxide and carbon-monoxide emissions into biodegradable plastics (see Novomer Raises $6.6M for Plastics from Pollution).