The centre will develop understanding of enhanced oil recovery (EOR) technology, which could unlock three billion barrels of oil from the North Sea worth £190bn.
The University noted the technology could store 75 million tones of CO2 from each power plant CCS project, and increase the amount of oil removed from reservoirs beneath the sea by five to 25%.
The captured CO2 would be transported to the North Sea where it is injected into oilfields, forcing out additional oil, with the CO2 remaining permanently stored deep underground.
Scottish First Minister Alex Salmond said clearly the country are uniquely placed to take advantage of this potentially game-changing technology, much of which is being pioneered in Scotland through the widely respected work of the SCCS group.
"The combination of this work with new research into developing CO2-EOR for the North Sea offers mutual benefits for CCS and oil recovery, including the prospect of considerable economies of scale to help drive forward CCS developments," Alex added.
The Centre is funded by the Scottish Government, Scottish Enterprise including commercial funding from 2Co Energy.
The centre will also team with Scottish Carbon Capture and Storage, a collaboration between the University of Edinburgh, Heriot-Watt University and the British Geological Survey, for the research work.
Initially, it will initially tackle the technical, regulatory, social and economic challenges of accelerating the widespread deployment of CO2-EOR technology across the North Sea.
