A $10-million carbon capture and storage trial has been completed in the Otways.
The CO2 Cooperative Research Centre is testing storing carbon in rock underground near Nirranda.
The chief executive, Richard Aldous says the trial has shown that carbon produced from burning coal can safely be stored.
"Our first project, where we stored 60,000 tonnes of CO2 underground, allowed us to demonstrate that CO2 can be safely stored underground," he said.
"But it also allowed us and our scientists to monitor very closely, precisely how it was happening, how it was interacting with the rocks."