Mining giant BHP Billiton will fund a study of the potential for low-emissions technology in China's iron and steel sector, its biggest market.
BHP, the top global miner and biggest exporter of coal used in steelmaking, has signed a three-year agreement with Peking University and China's National Centre for Climate Change Strategy to help set up a centre focused on developing low-emissions technology.
It will contribute $US7.4 million($A10.04 million) to the program, which is also tasked with identifying key policy, technical and economic barriers to deploying carbon capture, use and storage(CCUS) projects in steelmaking in China.
"As a major metallurgical coal and iron ore supplier, BHP Billiton has a role in working with our customers, industry and research institutions in China," chief executive Andrew Mackenzie said in a speech in Beijing.
"The work to be undertaken through this agreement is a necessary first step to get the fundamentals right and accelerate CCUS development and deployment."
China last year announced it would fast-track the introduction of a carbon market by 2017, as part of a joint effort with the US to tackle global climate change.
The move preceded a global agreement between more than 170 countries to cut carbon emissions in order to limit global warming below 2 degree Celsius.
The tough climate policies have raised concerns of large investors over growth prospects for companies with large fossil fuel assets, forcing big miners such as BHP to consider future scenarios.
BHP sought to allay fears last year by releasing analyses for its major businesses that showed the company would double earnings over the next decade and a half, despite globally mandated cuts in carbon emissions.
Earlier this year, it pledged $20 million for a knowledge centre in Canada's Saskatchewan province to develop carbon capture and storage technologies with local electricity provider SaskPower.
The efforts are part of its strategy to help shore up coal demand by promoting the cleaner burning of fossil fuels, while at the same time promoting renewable energy technologies.
