Scottish Power has said it wants to begin extracting methane from beneath one of its coal-fired power stations.
Methane extraction is one of a series of changes being considered
The company has applied for planning permission for the pilot project at Longannet power station, in Kincardine.
The plan would be to deposit carbon dioxide in a coal seam. The methane would then be pushed out, collected and burned for power.
It has been hailed as the first project of its kind in the UK. A similar, smaller scheme was tested in Australia.
Several schemes have been planned by Scottish Power, which needs to substantially reduce its carbon emissions.
Longannet, which generates about 40% of Scotland's electricity, is also the biggest source of carbon dioxide emissions.
The plant would only be able to generate a small amount of electricity, but would enable Scottish Power to reduce emissions at the site by burying carbon.
A company spokesman said: "We have to reduce emissions because it is causing climate change. But we need coal because it is flexible.
"We can turn it on and off quickly in response to demand.
"We would push carbon into the coal seam directly. It would then displace the methane, we could collect it and then burn it.
The deep mine where the methane would come from flooded in 2004. Since then the coal has become inaccessible.
The proposals still have to be approved by planners at Fife Council.
Scottish Power has confirmed that it would receive £2.3m from the UK Government to research carbon capture schemes.
The company will work with Edinburgh University to look for sites where carbon can be stored underground.
A saline aquifer below the seabed of the Firth of Forth has already been identified as a location.