Oil major BP and Chubu Electric Power said Friday they would study the feasibility of a carbon capture and storage (CCS) project near the port of Nagoya to help reduce carbon dioxide emissions.

Under a memorandum of understanding signed a day earlier, the companies would form a broad alliance in decarbonization businesses in Japan and other key markets in Asia, they said in a joint statement.

In the first step, they will explore the feasibility of collecting carbon dioxide from major emitters in Nagoya and transporting it to storage sites, potentially overseas, they said.

Nagoya is Japan's biggest port in terms of cargo volume and is located near steel, automotive and other manufacturing plants. Industries around the port account for 3% of the country's total emissions, and the port aims to cut the area's emissions by 35% by 2030 compared to 2013 levels.

The total investment of the Nagoya port project could reach several hundreds of billions of yen, according to Hiroki Sato, Chubu's senior managing executive officer.

"We aim to make a final investment decision on the project by around 2026 and start operation in 2030," he said.

In January, the industry ministry set a target of annual carbon dioxide storage capacity of 6 million to 12 million metric tons by 2030 under a long-term roadmap for CCS.

Japan sees CCS technology — which removes carbon dioxide emissions from the atmosphere and stores them underground — as essential to achieving its goal of carbon neutrality by 2050.

The country's top steelmaker, Nippon Steel, trading house Mitsubishi Corp. and Exxon Mobil also said last month they will jointly study CCS and the establishment of CCS value chains in the Asia-Pacific region.