Exxon Mobil Corp.'s foray into carbon capture and storage technology with FuelCell Energy Inc. "is making progress," Cowen & Co. analyst Jeffrey Osborne wrote in a research note Tuesday. The technology has moved from the lab to a commercial test at a power plant in Alabama.

The beauty of capturing carbon from coal or natural gas-plant exhaust is that routing the fumes through fuel-cell systems generates additional electricity. While the U.S. is retiring dozens of unprofitable coal plants, the fuel still provides 30 percent of the country's power.

The technology could be licensed globally to help countries reach greenhouse-gas reduction targets, Cowen analyst Sam Margolin wrote in a note. "We view a successful launch of this technology, albeit in the outer years, as material to the outlook for natural gas demand," Margolin said.

Cowen researchers don't include it in revenue forecasts for FuelCell because they "always assumed it was one of many futuristic growth options," Osborne said. 

For FuelCell Energy, the market opportunity could be huge. Capturing 90 percent of the emissions at just 1 percent of U.S. coal plants would require 2,160 megawatts of fuel cells, equal to about $6.5 billion in sales and $9.7 billion in service revenue, Osborne estimates. The company posted sales of $108 million in fiscal 2016.

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