Scotland is poised to become a world leader in “carbon capture” technology by building a plant on the Firth of Forth to store the greenhouse gas carbon dioxide.

Under the plan, millions of tonnes of carbon dioxide from the coal-fire power station at Longannet, in Fife, would be liquefied and buried deep beneath the sea bed.

The liquid CO2 would travel hundreds of miles along a pipeline before being injected into a field of porous rock under the North Sea. The £1 billion project, which is being drawn up by Scottish Power, would put Scotland at the cutting edge of the new technology.

Ministers in London are keen to kick-start carbon capture on an industrial scale and have offered to bankroll the first plant in Britain that works successfully.

Longannet, which is the country’s second-largest coal-fired power station, is one of three potential carbon capture hubs that have been identified in the UK, the others being in Humberside and Teesside.

However the plants in England, which are being planned by the energy companies E.ON and RWE, would require new coal power stations to be built and would therefore take much longer to become operational. Scottish Power believes its 300 megawatt plant could be up and running by 2014.

Carbon capture is regarded as a lucrative and emerging industry with the potential for British companies to sell the technology around the world. The global market is estimated to be worth £71 billion per year between now and 2030, with CO2 emissions from coal combustion accounting for half of total emissions.

Ignacio Galán, chairman of Scottish Power, said last week he believed Scotland was capable of becoming a world leader in carbon capture and storage.

“We are very committed to this,” said Galan. “We want Scotland to be our sole centre of excellence [for this technology].”

Times Recommends

• How I lost the gift of joy for a while
• Why Ann Widdecombe has got it wrong
• Alas, it’s the end of the road for petrolheads