The British government on Monday launched a competition to provide 20 million pounds this year to companies developing cheaper and more efficient components for carbon capture and storage (CCS) plants.

The funds are on top of a one-billion pound state tender for CCS projects due in the coming weeks.

The government has set aside 125 million pounds for research and development of CCS components over a four-year period, to be distributed in collaboration with three technology research groups.

By supporting research and development, this 20 million pound competition is an important step towards making cost competitive CCS a reality by the 2020s, Britain's Energy and Climate Change Secretary Edward Davey said.

The government is under pressure to deliver a new CCS construction programme in Britain, after its latest attempt to finance a project in Scotland collapsed due to spiralling costs.

CCS is an expensive and commercially unproven technology, but the government sees its development as vital to help reduce carbon emissions from power plants.

Britain's energy ministry said in a pre-tender document issued in the European Union's official journal that it expected new CCS projects to start operating by 2016-2020.

(Reporting by Karolin Schaps; Editing by Alison Birrane)