The Queensland Government has scrapped plans for a multi-billion-dollar 'clean coal' power station in central Queensland.

Premier Anna Bligh says the ZeroGen project into carbon capture technology is not viable at the moment.

She says more research is needed into the identification of suitable storage sites to support an integrated power plant.

Ms Bligh says it has not been a waste of more than $100 million in taxpayer funds.

"The Queensland Government is not walking away from ZeroGen or from clean coal technology," she said.

"In fact, the Queensland Government will be spending more on this technology over the next three to four years and we'll be doing it hand in hand with an agreement with the coal industry."

But Opposition science and research spokesman Scott Emerson says it has been a waste of money and another bungle by the Government.

"Research is needed but what isn't needed is a waste of $100 million of taxpayers' money," he said.

"This Government was told in a report that it needed not to spend this amount of money. It was told to withdraw from the project before it spent another $40 million."

The ZeroGen project has been canned because a suitable site to store carbon has not been found for the power station near Rockhampton.

But the Federal Government has criticised the State Government's decision.

Federal Resources Minister Martin Ferguson says he is disappointed because the Federal Government was lobbied hard by the state to financially support the project.

Coal Industry Association spokesman Ralph Hillman says he expects a new site will be found in the Surat Basin to build a clean coal power station by 2013.