1) Navigate to http://<yourportal>/admin?action=list&path=/sitebuilder/content/groups/Emails
2) Using the 'edit text' icon, open whichever email template you'd like to edit
in the message where the new lines should be (as this is the break character written in XML)
4) Save and republish the email template you just edited
This will now provide line breaks and paragraph spaces where ever you decided to make them.