The prize is big, but so is the problem.

A group of Canadian oilsands companies along with U.S.-based NRG Energy is funding an XPrize competition designed to solve one of the world's most elusive problems: how to reduce CO2 emissions from the burning of fossil fuels. There is $20 million U.S. up for grabs.

''Even a garage entrepreneur can win this prize. If you have a good idea, we want to hear from you." - Dan Wicklum, Canada's Oil Sands Innovation Alliance

The contest opens this morning and runs for 4½ years. The teams are challenged to develop technologies that convert the most CO2 into one or more products with the highest net value.

The XPrize Foundation dropped a few hints to work with, suggesting alternative cement, concrete and other building materials, or chemicals used to manufacture a variety of industrial and consumer goods.

Or something altogether new.

"The competition itself has no limits, anyone in the world can enter," said Dan Wicklum, the head of Canada's Oil Sand Innovation Alliance (COSIA), a group of 13 Alberta oilsands producers, that is funding half the prize.

"You could work for a university, small company, a large company, oilsands company, or not. Even a garage entrepreneur can win this prize. If you have a good idea, we want to hear from you."

Teams can register

The contest will start registering teams as of today.

Adrian Corless, the chief executive of Calgary-based Carbon Engineering, is working to harvest CO2 from the air to create synthetic fuels. Corless said his team will have a look at the term of reference of the prize, and may enter the contest.

Carbon Engineering is already a finalist for the Virgin Earth Challenge, a $25-million prize for the best technology to remove greenhouse gases from the atmosphere.

"The reality is that the costs in developing technology that are relevant in terms of carbon capture at a large scale, they are very, very large, so whether it's going to motivate new entrants into this field or not for $20 million, I think you have to have your own reason for being in this space beyond that."

There are two streams in the contest, with the new technologies tested at either a coal power plant or a natural gas facility. The prize could be won by one team whose technology worked for both coal and natural gas CO2 emissions, but it's more likely that it will be split by two teams.

Along with COSIA, the prize is co-sponsored by NRG, a company that promotes green technologies.

Greenwashing?

"In a sense this is corporate crowdfunding," said Ken Wong, a marketing expert at Queen's University in Kingston, Ont. "Here's an initiative who's got a stake in the benefits of that initiative and let's hit them up for the prize money."

Wong doesn't believe that it's greenwashing on the part of the energy industry.

"It would be greenwashing if they come together to donate $20 million to some cause, but they weren't going to change their operations in any way."

XPrize is a non-profit organization that designs public competitions to encourage technological development. It will appoint a judging panel and scientific advisory board to guide and judge the entries.

For his part, Wicklum said he is optimistic that the contest will spark innovation that will help the oilsands industry with its CO2 problem.

"These incentive prizes have a proven track record. They work," he said.