Two new coal plants will be built in Victoria as the state and federal governments put millions of dollars into developing new uses for the resource.
A $50 million joint investment by the Victorian and federal governments will go towards two advanced coal projects which will produce products such as oil and fertiliser from the state's brown coal reserves.
Victorian Deputy Premier Peter Ryan said the venture would help the state develop further uses for coal while boosting the Latrobe Valley's economy.
"This joint investment will enable the development of new smarter, cleaner and sustainable uses for this important resource," Mr Ryan said on Friday.
Energy and Resources Minister Russell Northe said the projects had the potential to bring significant employment and investment to the Latrobe Valley.
Under the State-Commonwealth Advanced Lignite Demonstration Program, Coal Energy Australia will receive a $30 million grant towards its $143 million demonstration plant producing fertiliser, oil and coal used in steelmaking.
Ignite Energy Resources will get $20 million for its $84.3 million pre-commercial plant making upgraded coal products for local or export markets along with synthetic oil.
Friends of the Earth spokesperson Shaun Murray said it was perverse that taxpayer money was being spent on propping up greenhouse gas-intensive industries.
"The international scientific community is urging rich countries like Australia to lead the way with deep cuts in greenhouse gas emissions," Mr Murray said.
"It is perverse we would be throwing public money into attempting to develop new ways to use brown coal."
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