European countries will be able to use money from a key EU scheme for reducing climate-changing carbon emissions to build new coal-fired power stations, documents leaked to The Independent newspaper suggest.

Billions of pounds in revenues from the EU's Emissions Trading Scheme (ETS) – under which power plants have to buy "permits to pollute" so they have an incentive to drive their emissions down – may find their way into state aid for new coal-fired power station construction across the continent.

The bizarre situation of a climate policy pulling in two directions at once arises from concessions made to new and poorer EU member states such as Poland, when the EU was drawing up its current "20-20-20"climate change regime, seeking to cut emissions by 20 per cent, and secure 20 per cent of energy from renewable sources, by 2020.

With more than 90 per cent of its energy coming from coal-fired electricity, Poland feared it would find the ETS especially burdensome, so the EU agreed that some of the trading scheme's revenues could be used as state aid for construction in the energy generation sector.

But rather than applying the rule to Poland in isolation, it was decided that it would apply to every country to ensure a "level playing field" across the EU. At the moment not all permits are sold – some are given away. Britain currently sells about 7 per cent of its carbon permits, for which it receives just over £50m annually. But after 2013, 100 per cent of permits will be sold, and the revenues generated across Europe will be enormous, with Britain alone set to raise £40bn by 2020. Sales of pollution permits will raise tens of billions of pounds between now and 2020 for almost every country in Europe.

The unpublished guidelines for how this mountain of cash may be used in state aid for power station construction have been seen by The Independent. They say the funds could be used to provide up to 15 per cent of the costs of "highly-efficient CCS-ready power plants". But environmental campaigners are critical. "CCS-ready" means a power station ready to be fitted with carbon capture and storage, the new technology which, some time after 2020, it is hoped, will extract the CO2 from a plant's waste gases and store it under the sea bed. CCS may offer real hope for bringing emissions down, but "CCS-ready" can merely mean that a power station has an adjacent site on which a CCS plant could be built.

"Highly efficient" is a similarly relative term. Under current EU guidelines, values could be used for a coal plant which is only 44 per cent efficient – that is, it loses 56 per cent of the energy it produces in transmission.

Green campaigners say this means there could be massive government subsidies across the continent for building what are in effect old-fashioned "dirty coal" power stations – the sort that the EU's climate policy is supposed to be phasing out. There are currently 68 new coal plants in the planning stage in the EU, the highest number of which are in Germany.

"What these documents show is that billions of pounds raised through a scheme that was meant to help reduce pollution could be handed to massive German energy companies to actually increase pollution by helping them to build the most polluting power stations that exist," said Joss Garman, energy campaigner for Greenpeace.

"It's exactly like taking money from Weight Watchers and handing it to McDonald's to run advertising campaigns for Big Macs in schools. It's utterly perverse and it requires Gordon Brown to step in and stop this madness."

A typical coal-fired power station might cost £2bn to build – so a 15 per cent subsidy could amount to a £300m state handout, for burning more coal.

Emissions trading

*The European Union's Emissions Trading Scheme (ETS) is the principal instrument by which climate-changing carbon emissions will be driven down across the EU.

*Emissions trading is a way of offering a financial carrot to polluting companies to persuade them to clean up their act, at the same time as threatening them with a financial stick. Heavy plants are allocated permits to emit a certain amount of carbon dioxide in the course of their operations, one permit being equivalent to a tonne of CO2.

*Once they reach the end of their allocation, they have to buy more permits, which in theory ought to be very expensive. But if they cut their emissions to below their limit and have permits left over, they can sell them on the "carbon market" to other companies that may be emitting too much.

The Isle of Grain – now approaching its fifth birthday – is preparing to open more capacity by the end of the year, in preparation for the influx of liquefied natural gas shipments that will be needed to keep Britain's lights on over the next decade. Energy companies are highly secretive about the origin and ownership of tankers that dock in the terminal's two jetties, ready to be injected into Britain's gas grid. But most of the UK's supply of liquid gas is known to come from the major producing areas of Trinidad, Algeria and Qatar.

This winter, as Norwegian pipeline supply from the North Sea failed amid record gas demand in the cold snap, Britain derived more than 50pc of its gas from liquid tanker sources for the first time. Peter Boreham, director of the Isle of Grain, is among the National Grid executives who will imminently decide whether to expand the port even further beyond the current £1bn investment that includes six storage tanks, each the size of the Albert Hall.

"We're having very positive discussions with a number of different potential clients. But they require clarity in the long-term energy policy of the UK before they make a decision," he says.

Certainty is one thing gas importers such as Eon, Iberdrola, Centrica and BP at the Isle of Grain are unlikely to get in the near future, with key differences between the political parties on how to tackle a potential shortage of power generation in the second half of this decade.

Ed Miliband's Department of Energy and Climate Change has pledged not to let gas imports rise from 2010 levels – a prediction regarded sceptically by industry. Meanwhile, the Government has placed its bets on new nuclear stations from 2017 onwards, a third of electricity from wind power by the end of this decade and an increase in energy efficiency. The Conservatives, who likewise support nuclear power and consider wind a key part of the energy mix, are worried about excessive dependence on gas, but have made it a key plank of their policy to encourage more storage, pointing out that Britain only has 12 days of storage to meet winter demand, while Germany has more like 57 days.

But experts are warning that hung parliament could mean that the UK has little choice but to increase its reliance on imported gas, since the Liberal Democrats' fervent opposition to nuclear power could throw a spanner in both Tory and Labour plans to rely on this as a major new influx of power.

Omar Abbosh, head of utilities at Accenture, believes any delays to major energy infrastructure caused by a coalition or slender majority government would be the worst possible outcome from an election for investors. "It's very simple. If we imagine a hung parliament, executing big policy decisions is going to be much harder," he says. "Any increased insecurity of supply and we will end up building more gas power."

It is not clear whether Nick Clegg, the Lib Dem leader, would insist on vetoing nuclear power as a crucial deal-breaker in a coalition government. So far he has stated that his opposition is "not theological", objecting on the grounds of cost rather than safety or environmental concerns. One acolyte of Simon Hughes, the party's energy spokesman, hinted that they could be willing to work with another party on nuclear plans, but would insist on holding a public inquiry into the move. This could be costly and lengthy at a time when companies need certainty on the investment climate for nuclear.

Richard Nourse, managing partner of €200m (£174m) renewable energy fund Novus Modus, reckons hold-ups with nuclear would inevitably push the UK towards the cheapest, quickest to build and lowest-carbon option

"There is a risk of delays to nuclear and reform of the planning system with a hung parliament, not least because LibDems say they not in favour of nuclear on cost grounds. Nuclear is a long journey and developers need confidence to keep travelling. Gas is the quick fix fuel but should not be the ultimate answer."