On 23 January 2008, the European Commission announced its new renewable energy proposal. Key to the proposal are: (i) an overall binding target for EU Member States to ensure that 20 per cent of the energy consumed in the European Union is renewable energy by 2020; and (ii) binding targets for each Member State. Member States may meet their national targets by using green power certificates bought from other Member States. The Commission considers that integration of the existing trading schemes within the European Union could provide an impetus for the development of an international market for green certificates.

The introduction of a trading mechanism for green power certificates has been criticised by Germany, Spain and the renewables industry because they believe it would undermine existing national support schemes such as subsidised feed-in tariffs and premiums (i.e. State aid). These national systems supporting renewable energies already exist in 18 of the 27 EU Member States.