The Coalition will consider a form of carbon pricing for power companies as part of a long-awaited review of Australia's climate policies, Environment and Energy Minister Josh Frydenberg has confirmed.

The review of the Coalition's direct action policy will focus on electricity price rises, energy security and cutting greenhouse gas emissions but will also look at whether to introduce an emissions intensity scheme for electricity generators – a type of carbon price different to the abolished scheme brought in by the Gillard Labor government.

The possible resurrection of carbon pricing is likely to trigger intense internal debate within the Coalition once the review gets under way next year, while environment groups and the federal opposition are likely to claim the terms of reference for the departmental review lack ambition, given the threat posed by climate change to the planet.

Those terms of reference, released by Mr Frydenberg on Monday, also include consideration of a long-term emissions reduction target for beyond 2030 and the use of international carbon permits created through emissions cuts overseas.