The project will develop and test technologies that can be integrated into steel production processes to reduce carbon dioxide (CO2) emissions, BHP said in a statement.

HBIS will also pilot test options to use captured CO2 to produce saleable products and to store CO2 in waste slag, BHP added.

The trials will be funded by an investment of up to $15 million over three years, as proposed in a memorandum of understanding signed by the firms in 2021.

"This collaboration between BHP and HBIS, a leader in the global steel industry and an important customer for our iron ore, will provide a strong example for the industry to follow towards the wider deployment of CCUS and towards achieving major reductions in the CO2 emission intensity of steel production," said Mike Henry, BHP's chief executive officer.

China is the world's top steel producer, and its steel industry accounts for around 15% of total carbon emission across the country.

China emitted more than 2 billion tonnes of the greenhouse gas in the steel sector in 2021, accounting for around 61% of the world's total of over 3.3 billion tonnes in the industry, consultancy Wood Mackenzie said in one of its studies.

BHP and HBIS both aim to achieve carbon neutrality by 2050, according to their websites.

(Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Jamie Freed)