Estonia would sell 10 million carbon credits to Japan’s Mitsubishi Corporation and use the proceeds to set up a nationwide network of chargepoints for electric cars.

Prime Minister Andrus Ansip said the government had approved the sale of the unused credits – tradeable allowances granted by Brussels to European Union members in a drive to limit greenhouse gas emissions by industry.

“Under a Green Investment Scheme, the proceeds will be invested into the establishment of a country-wide charging infrastructure for electric vehicles,” said Mr Ansip.

Around 500 Mitsubishi i-MiEV electric cars are to be provided to local authorities for use by social workers. A grant scheme is also to be set up to support the purchase of electric vehicles by private individuals.

“We hope that around 1,000 electric cars will be on our streets by the end of 2012,” Mr Ansip added. That figure includes the 500 allocated to local authorities.

Estonia is a former Soviet-ruled nation of 1.3 million which joined the EU in 2004.

The plan involves setting up some 250 points able to charge an electric vehicle’s battery to up to 80 per cent capacity within 30 minutes. They are to be located in major cities and along main highways.

“This is a very innovative project. The future will show whether and when electric cars will be in mass use, but this will help us to increase rapidly the number of electric cars in Estonia and to save energy,” Economy Minister Juhan Parts told reporters.