A government consultation is looking at offering developers a guaranteed price for the electricity produced by the power plant and a price for each tonne of carbon dioxide captured.
Britain hopes technology to capture emissions at power stations and industrial factories will help it achieve its target of net zero emissions by 2050 to tackle climate change.
British power generator Drax is seeking to develop a carbon capture project at its biomass power plant in North Yorkshire, England, but has said it would need a support mechanism from the government to make the project viable.
"Drax plans to invest 2 billion pounds ($2.4 billion) in what will be the biggest carbon capture in power project in the world, supporting UK energy security, delivering thousands of jobs in the north in the 2020s," Drax CEO Will Gardiner said.
Drax said in a separate statement on Thursday that it could begin construction on the project in 2024.
($1 = 0.8195 pounds)
(Reporting by Susanna Twidale; Editing by Alexander Smith)
