Methanation converts hydrogen and carbon dioxide (CO2) into synthesized methane, an alternative of the main component in natural gas, and it is considered a way of using CO2 as a raw material that could help the company achieve carbon neutrality in 2050, it said.
Methane can be used in many ways, including as a fuel to generate heat and electricity in power plants or at home, and as a raw material for the chemical industry.
Tokyo Gas plans to start the pilot programme at its research centre in Yokohama, near Tokyo, initially using hydrogen and CO2 procured from outside.
It also plans to use hydrogen generated by a water electrolysis device from Britain's ITM Power PLC, which it aims to install at the test site by next June, as well as CO2 emitted and captured from nearby factories or its customers in the future.
It plans to use Hitachi Zosen Corp's methanation device.
Tokyo Gas wants to develop the technology and a supply chain as it can use existing natural gas infrastructure such as pipelines, storage tanks, gas-fired power plants and tankers.
"To reduce social costs, it is important to make effective use of existing infrastructure, and methanation is a promising option for decarbonisation of gas energy," Kentaro Kimoto, Tokyo Gas' senior managing executive officer, told a news conference.
(Reporting by Yuka Obayashi; Editing by Mark Potter)