The US Department of Energy has laid out plans to offer up to $8 billion (£5.25bn) in loan guarantees to develop technologies that cut carbon emissions from extracting and burning fossil fuels.

It will support new or significantly improved fossil fuel energy projects and facilities – such as carbon capture, low carbon power systems and efficiency improvements – that reduce emissions of carbon dioxide, methane and other greenhouse gas pollution.

The move it part of the climate change agenda revealed by President Barack Obama last week, with some in the UK calling for the Government here to follow his lead on energy policy.

Energy Secretary Ernest Moniz (pictured) said: “These investments will play a critical role in accelerating the introduction of low carbon fossil fuel technologies into the marketplace and reduce greenhouse gas pollution. Fossil fuels currently provide more than 80% of our energy and adopting technologies to use the cleanly and more efficiently is critical to our all-of-the-above approach.”

The Energy Department has issued a draft proposal for the programme and is looking for suggestions that could end up expanding the types of technologies that would be eligible for a loan guarantee. It plans to finalise the proposal and issue a formal request for project proposals later this year.

Earlier this week the US Government also announced funding for four advanced nuclear reactor projects in the country.