The plant will be built at the Dow-owned facility in South Charleston, W.Va., Dow Chemical Co. announced.
Alstom will design, construct and operate the plant, which is expected to capture about 1,800 tons of carbon dioxide per year.
"We are thrilled to be part of this groundbreaking project in carbon dioxide capture," said Janet Giesselman, president and general manager of Dow Oil & Gas.
The plant is expected to be complete by the third quarter of 2009.
"Coal, which represents over two-thirds of the world's power generation, is and will continue to be an essential part of the world's energy mix," said Philippe Joubert, Alstom executive vice president and president of Alstom Power. "But only by reducing its carbon dioxide output can coal remain a viable source of power generation."
The coal will come from mines in West Virginia.