Some of the biggest industrial companies in Japan are working on a project that could trigger a wave of investment into one of the most controversial forms of carbon capture: methanation.

Shipping giant Mitsui OSK Lines Ltd. (MOL) is leading a working group of nine Japanese companies including steelmakers Nippon Steel Corp. and JFE Steel Corp. to assess the viability of producing and using methane to power "zero-emission ships” instead of liquefied natural gas or other fossil fuels, including a fleet of new vessels that would transport carbon dioxide for processing.

Methanation is "the most realistic solution” for MOL to achieve net-zero emissions by 2050, Takeshi Hashimoto, chief executive officer said in an interview. "The challenge for the next one to two decades is whether the company could turn the technology into a sustainable and practical solution” by reducing the cost, he said.