March 28 (Bloomberg) -- It’s a tantalizing promise that one day “carbon capture” will remove greenhouse gases from the smoke made by coal-fired power plants. After all, these plants, which provide 45 percent of electricity in the U.S., account for more than a third of the country’s carbon dioxide emissions.

Small-scale experiments have been successful enough that, at this point, engineers have little doubt the technology can work. Yet efforts in the U.S. to advance it are stalled. What was to have been the nation’s first commercial-scale project -- at Mountaineer, a coal-burning electricity plant in New Haven, West Virginia -- has been put on hold.

Meanwhile, in China, carbon capture marches steadfastly ahead, as an article in the May issue of Bloomberg Markets magazine reports. A pilot project by China Huaneng Group Corp. has been able to remove carbon from coal-plant exhaust for about $39 per ton of captured CO2, which is a little more than a third of what it costs in the U.S.

The work has been so impressive, as John Lippert and Chua Baizhen report, that Duke Energy Corp., the largest U.S. energy company, has signed a research agreement with Huaneng to study its technology. Duke wants to learn how much it would cost to retrofit its largest power plant, in Gibson County, Indiana, to capture carbon.

The Chinese plant filters the smoke through an aqueous amine solution rather than through chilled ammonia, as is commonly done in U.S. carbon-capture experiments. Duke would like to find out how much of Huaneng’s cost savings flow from its proprietary technology, and how much is attributable to lower labor and capital costs.

How can it be that China has taken the leadership role on clean coal? The answer has to do partly with China’s greater need, given its overwhelming reliance on coal for power. Unlike the U.S., China lacks huge stores of natural gas to tap as an alternative.

It also has to do with China’s controlled economy, which makes it possible for its power plants to take on greater costs and risks than American electricity providers can.

The Chinese government plans to finance a demonstration project that, by 2015, captures a million tons of carbon per year. And energy companies are competing with one another for the prize.

The U.S. wants cleaner coal, too. On Tuesday, the Environmental Protection Agency proposed limits on power-plant emissions so strict, they essentially forbid any new coal-fired generators that lack carbon-capture mechanisms. State and federal policy makers could take certain steps to emulate China’s success in developing a sturdy platform for innovation in this technology.

The U.S. already has many promising experiments in progress. One project at Lehigh University in Bethlehem, Pennsylvania, for example, is financed by the Department of Energy’s program for advanced research and uses electric fields to separate carbon from power-plant exhaust. Other labs, also supported by the same program, are developing a synthetic enzyme to do the same thing.

The trick is to not only experiment with new technologies but also put them to use in full-size power plants.

State public service commissions that regulate energy utilities could help by allowing power companies to charge their customers some of the cost of fitting plants with new carbon-capture technology. Such an allowance in Indiana, for example, might encourage Duke to go ahead and deploy the Huaneng technology on its Gibson County plant.

The federal government, too, could help push the technology forward, by taking up a smart strategy that has been suggested by a coalition of oil industry executives, environmentalists and state officials called the National Enhanced Oil Recovery Initiative. It has to do with the other side of the carbon-capture equation -- what to do with the CO2 once you’ve taken it out of the power-plant exhaust.

China’s Huaneng plant sells its carbon dioxide to companies that make carbonated drinks and dry ice. Duke envisions turning it into solid carbonate to be used for building materials or road construction. Some innovators are feeding CO2 to microscopic algae to produce either fuel or proteins used in nutrition supplements or animal feed.

But it can also be used to coax more oil out of the earth. Since 1972, oil companies have injected carbon dioxide taken from natural sources to free up crude trapped in rock formations. The industry operates 3,900 miles of pipelines carrying 65 million tons of CO2 per year, and “enhanced oil recovery,” as the technique is known, accounts for 6 percent of U.S. oil production.

With new technology and enough CO2, the industry could use enhanced recovery to increase production by 67 billion to 137 billion barrels, according to a report from the National Enhanced Oil Recovery Initiative. The report envisions using 20 billion to 45 billion metric tons of CO2 from carbon capture -- the total amount expected to be produced by power plants for the next 10 to 20 years.

We endorse the coalition’s recommendation that Congress create a production tax credit for power companies that capture CO2 and send it to oil companies for enhanced recovery. By increasing domestic oil production, such a credit is estimated to be able to pay for itself within a decade.

The U.S. will never, and should never, have the kind of government-directed programs that are helping China advance carbon-capture technology. But we can learn from China’s success and clean up coal in our own way.

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