Residents of an isolated beach village in Victoria's east are fighting carbon capture and storage (CCS) plans off their coastline.

A plan to use depleted oil fields in the Bass Strait to store carbon are being investigated by the Victorian Government through its Carbon Net project.

The carbon sinks are the key to a $500 million pilot project, announced by Prime Minister Malcolm Turnbull in April, to convert the Latrobe Valley's brown coal to liquid hydrogen for export to Japan.

The hydrogen will be used to create clean electricity, but for that to succeed as a clean energy option the carbon dioxide produced will have to be captured and stored.

Beach communities oppose the plan

The plan has angered locals and holiday makers at Golden Beach and Paradise Beach — home to about 300 people.

They fear their way of life and the pristine environment along Ninety Mile Beach is being sacrificed to support industry.

If the plan goes ahead it will be the first industrial-scale CCS project in eastern Australia.

Erin Foster is a member of the Ninety Mile Beach Action Group Against Carbon Storage, and was worried about the impact it could have.

"The fact that they're sort of testing it out here and they've got this big coal to hydrogen project in the works, it just seems like we're the guinea pigs and they're trying to use us," Ms Foster said.

Golden Beach resident Heather Lloyd is worried that CCS will cause environmental damage. ( ABC Gippsland: Nicole Asher )

The group is gathering members to fight against the CCS plan.

Golden Beach resident Heather Lloyd said residents were unhappy at the level of information provided from all levels of government.

"This has been going on for three or four years and we've only recently in the last few months found out this is even happening," Ms Lloyd said.

"People are concerned about the environment; you only have to look around here to see what an absolute pristine part of the world it is.

"They talk about how you have to go to the Antarctic to see the stars in their fullness, [but] let me tell you, this is like being at the Antarctic, there's no pollution, there are no street lights.

"People made the decision to build a house and live here because of the pristine environment and now that's threatened."

Experts defend CCS

CCS has been trialled in the Otways and experts are confident the technology is safe.

The State Government has already conducted seismic surveying of the seabed off Ninety Mile Beach to test whether the area is suitable for carbon storage.

It has defended the way its Carbon Net team informed residents of the process and has moved to reassure them nothing will happen unless it is safe.

The Ninety Mile Beach community, including people at Golden Beach and Paradise Beach, fights plans to store carbon dioxide under the seabed in Bass Strait. ( ABC Gippsland: Nicole Asher )

"CarbonNet has engaged with the Golden Beach community and key stakeholders regularly, [and] for the marine seismic survey earlier this year the team were talking to locals about it from March 2017," Carbon Net acting director Jane Burton said.

"It's important to keep local communities informed and the CarbonNet team will be looking to do more in the Golden Beach area," she said.

"Carbon capture and storage technology is safe and well-proven.

"Here in Victoria 80,000 tonnes of carbon dioxide has been safely stored in the rock layers below the Otways since 2008."

Director of the Peter Cook Centre for CCS Research and University of Melbourne professor Ralf Haese said carbon capture and storage had been used around the world for decades.

"We have the case in Norway where we have carbon capture and storage operating for over 20 years at a very large scale," Professor Haese said.

"That's a good demonstration that the technology works and under normal circumstances no leakage will occur.

"It gives me confidence that this technology woks, in principle."