Updated - Renewable industry slams proposal to water down EU targets

Renewable energy groups have united in condemnation of government proposals designed to make it easier for the UK to meet EU targets for renewable energy, warning that the proposals would deal a "hugely damaging" blow to alternative energy investment.

According to reports in this weekend's Guardian, the Department for Business, Enterprise and Regulatory Reform (BERR) is still exploring ways to relax the rules surrounding EU targets that require the UK to generate 15 per cent of its energy from renewable sources by 2020.

The newspaper claims that at a closed session of the energy council of ministers this month, the business minister, Lady Vadera, proposed that UK investments in renewable energy projects anywhere in the world should count towards the UK's domestic target.

EU members are currently discussing whether or not to allow countries within the union that exceed their targets to sell renewables credits to those countries that fail to meet their obligation. But Lady Vadera's proposals go much further and would allow countries to make up any shortfall in their own renewables capacity by funding projects in the developing world.

"It is imperative that cost efficiency is at the heart of our approach," she said. "Demand for renewable energy projects outside the EU should be considered [part of the renewable target]."

She also argued that the definition of renewables be extended to allow carbon capture projects to count towards the targets.

"Member states might be further incentivised to support carbon capture projects if they were allowed in some way to contribute to the 2020 [renewable] targets," she said.

The proposals were branded as "ludicrous" by the Renewable Energy Association (REA), which warned that allowing the government to meet its obligations by funding projects in the developing world would deliver a major blow to investors in UK renewables projects.

"[The proposals] are extremely worrying and would have a major impact on investment," said REA spokeswoman Leonie Greene. "If you can meet the EU targets by buying in credits from outside the EU, you will not be making the fundamental changes to the energy system that are desperately needed."

The latest news follows leaked documents last year from BERR which showed the department was considering ways to water down the proposed EU targets. Gordon Brown insisted at the time that the targets would be met and that the UK would not try to wriggle out of its obligation, but the latest reports have again cast doubt over this commitment.

A spokesman for the British Wind Energy Association (BWEA) warned that concerns that the rules surrounding the targets could be relaxed were undermining UK investment in renewable energy.

"We are seeing a lot of interest at the moment from wind turbine firms considering locating manufacturing facilities in the UK," he said. "They are attracted by the offshore capacity and the targets which should result in strong demand for their turbines, but they need to unambiguous signals from the government that the UK is fully behind the EU targets."

A spokesman for BERR insisted the government remained fully committed to driving up renewable energy capacity and is currently scoping a "vast expansion " of renewable energy production through projects such as the proposed Severn barrage.

He added that the proposals put forward by Lady Vadera were still subject to negotiation at an EU level and were intended to form part of a wider discussion on how the most cost effective means of cutting carbon emissions could be realised.

But Dale Vince, managing director of wind farm operator Ecotricity, warned that the proposals would provide further ammunition for those who oppose renewable energy developments. "Such a scheme would kill renewables in the UK," he warned. "It would provide the ultimate NYMBY argument - don't build them in my back yard, build them in China, it's easier and cheaper."