A new report from the National Audit Office has unveiled that around £100 million was spent on a competition for developing carbon capture technology before it was scrapped.
The project would have seen emissions from heavy industry stored permanently underground, however, according to the NAO, a failure by the UK government's energy department to agree the long term costs of the competition with the Treasury led to its cancellation.
The carbon capture and storage (CCS) competition was the second bid by the UK government to support schemes that capture pollution from power stations or industry and store it underground - potentially helping meet greenhouse gas targets.
Two bidders in the running for the project included the White Rose consortium in North Yorkshire which planned to build a new coal plant with the technology, and Shell's scheme in Peterhead, Aberdeenshire, which planned to fit CCS to an existing gas plant operated by SSE.
Amyas Morse, head of the National Audit Office, said: "The department has now tried twice to kick-start CCS in the UK, but there are still no examples of the technology working.
"There are undoubtedly challenges in getting CCS established, but the department faced an uphill battle as a result of the way it ran the latest competition.
"Not being clear with HM Treasury about what the budget is from the start would hamper any project, and caused particular problems in this case where the upfront costs are likely to be high."
He added: "The department must learn lessons from this experience if it is to stand any chance of ensuring the first CCS plants are built in the near future."
A spokesman for Business, Energy and Industrial Strategy (BEIS) said: "We haven't closed the door to carbon capture and storage technology in the UK, but decisions had to be taken to control government spending and protect consumer bills.
"This is why the government ended the funding for the CCS competition, and ensured taxpayers were protected from significant costs when the competition closed."