The low emissions plant, which is a joint venture of Shell and Anglo American which own Monash Energy, was due to be operational late next decade.

The plant would have dried brown coal, gasified it and converted it into a low emission transportation fuel, including a synthetic diesel, rather than electricity.

Monash Energy did not return calls from The Express yesterday but it is believed the project has been delayed because of the cost in the current economic climate.

The Age newspaper yesterday reported that while market conditions had made the project unfeasible, Monash Energy was not walking away from it altogether.

Emma Tyner, the spokeswoman for Energy and Resources Minister Peter Batchelor said the company needed to ensure the project was viable.

``Monash Energy, like other companies, needs to ensure its coal-to-liquids project stacks up economically and environmentally particularly with a price on carbon emissions and the global financial uncertainty,'' she said.

``However, the Brumby Government is providing a sound platform through its energy technology innovation strategy to encourage companies to invest in clean energy projects and believes the final design of the Federal Governments Carbon Pollution Reduction Scheme will provide more certainty to the industry.''