Although better known for its consumer electronics business, Toshiba owns and operates a number of gas power plants and is also the parent of global nuclear energy giant Westinghouse.
The company said the pilot CCS plant will be finished by August and will use post-combustion capture technologies to remove up to 10 tonnes of CO2 a day from the gas flue, mix it with an amine solvent and remove it from the site. It has not yet announced where it will store the resulting carbon solution.
The company says it will install other test systems at coal-fired power plants in Japan and overseas before bringing the technology to market, hopefully by 2015.
The announcement is the latest move in an escalating arms race between many of the world's leading energy and engineering firms to develop commercial-scale CCS technologies.
Swedish utility Vattenfall began operations of what it claims is the world's first power plant to demonstrate end-to-end CCS technology last month in Germany, while earlier this week both BP and Shell made fresh investments in CCS R&D, respectively unveiling plans for a new research initiative in China and announcing the acquisition of Canadian emission capture technologies specialist CanSolv.