Environment Victoria wants a $90 million “clean coal” fun to be spent on the transition away from reliance on coal.

The Victorian Government has announced that the Advanced Lignite Demonstration Program (ALDP) will be shut down after its third and final project, after being unsuccessful in finding a low-emissions use for the Latrobe Valley’s enormous brown coal store.

The ALDP was established in 2014 to fund projects on the proviso that they meet key milestones, but none of the three projects it processed managed to hit the targets.

Environment Victoria campaigns manager Dr Nicholas Aberle wants the funding redirected into the Latrobe Valley Authority, which helps workers and the community adapt to the closure of Hazelwood power station.

“The purpose of these projects was to bring investment to the Latrobe Valley but these particular projects have failed to bring any investment,” he told the Guardian.

“We know Hazelwood is not going to be the last coal-fired power station to close. We are going to need the Latrobe Valley Authority for much longer than four years.”

The Victorian Department of Economic Development, Jobs, Transport and Resources said Coal Energy Australia (CEA), “has invested in its ALDP project since 2014 but the opportunity has not developed as envisaged”.

CEA was granted $30 million start work on a $143 million trial plant to produce fertiliser, oil and metallurgical coal.

It failed to meet all of its funding milestones despite being granted multiple extensions, and made a net loss of $8.9 million in the most recent 2015-2016 financial year.

Mr Aberle said governments should change the way they think about coal.

“[Brown coal is] seen as this amazing, bountiful resource and that it would be a waste not to use it but we are getting to the point where we need to stop even thinking of this as a resource,” he said.

“It’s a thing that is under the ground, but if there’s nothing we can do with it then it’s not a resource.”