The so-called 'New Entrant Reserve 300' fund was agreed in 2008 by EU heads of state to support CCS technology – a method of burying harmful greenhouse gases spewed by industrial activity.
Many power producers see CCS as a potential silver bullet to curb climate-warming emissions from coal, but is still unproven on a commercial scale.
"The NER300 proposal was adopted on Wednesday, providing financial support for projects involving CCS and renewable technologies," a spokeswoman for the Commission, the EU's executive body, said.
Around eight eligible projects are expected to be given a share of the proceeds from the sale of 300 million carbon permits called 'EU Allowances' (EUAs) from the EU emissions trading scheme's (EU ETS) New Entrants' Reserve.
This reserve sets aside EUAs for new installations and extensions to existing facilities.
The 27-nation bloc's member states must present a list of qualifying projects to the European Investment Bank, which will eventually recommend to the Commission which projects to choose.
Under present plans, the bank will sell the NER300 EUAs on the EU carbon market. The bank is yet to detail exactly how and when it will do this.
The Commission is expected to disclose more details about the proposal on 8 November.
(EurActiv with Reuters.)