"The collaboration known as ACCOMPLISH (Algal Carbon Capture and Biomass-Linked Supply Chain) is a unique pilot which is part of a wider Swansea University project, EnAlgae," Tata Steel said in a statement.
Based at the Port Talbot steelworks, the project is analysing the capacity for natural algae to use carbon dioxide as a nutrient for growth, it said, adding, "the project contributes to Tata Steel's commitment to reducing unavoidable carbon dioxide emissions from manufacturing operations."
Tata Steel's Technical Director, Martin Brunnock, said: "We are committed to further improving the sustainability of our processes. It is projects like this, with leading academic partners, such as Swansea University here in Wales, which are making us leaders in the field of sustainable steel-making."
Dr Alla Silkina, from Swansea University, said: "This collaboration with EnAlgae is an important example of how working closely with industry can yield practical results for researchers and businesses.
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The company said the ACCOMPLISH project may grow, joining a series of initiatives which will add to the strong track record of Tata Steel in improving the environmental impact of steel-making.
It said the EnAlgae project is led by Swansea University and funded by the European Union. EnAlgae unites experts and observers from 7 EU member states to determine the potential benefits of algae as a future sustainable energy source.
The combined Tata Steel group is one of the world's largest steel producers, with a steel capacity of 29 million tonnes and 80,000 employees across four continents.