Germany builds world's first non-polluting coal power plant

German Chancellor Angela Merkel and the heads of the Swedish energy giant Vattenfall inaugurated the construction site for the plant, scheduled to go into operation in 2008.

Vattenfall has invested 50 million euros (about 63 million U.S. dollars) in the facility, located near the border between the eastern German states of Brandenburg and Saxony, according to the German radio Deutsche Welle.

Vattenfall CEO Lars Joseffson hopes to write "coal history," the report said.

"This investment in a new technology should pave the way and be a model of high-tech power generation on the basis of coal," he said.

The plant will process coal through Oxyfuel to produce electricity, but resulting in clean smoke separated from the carbon dioxide.

However, efficiency suffers during the process, which makes 35 percent of the coal become electricity, compared to 45 percent by traditional coal plants.