European Union leaders at a climate change summit in Brussels have agreed to slash carbon dioxide emissions by 20% from 1990 levels by the year 2020.
The European Commission wants cleaner sources of power
But a consensus on a binding target for the use of renewable fuels, like wind and solar power, has yet to be reached.
German Chancellor and EU President Angela Merkel said she was hopeful an agreement could still be struck.
The European Commission wants countries to pledge, among other things, to raise use of renewable fuels to 20%.
After talks ended on Thursday night, Mrs Merkel said progress had been made.
"What has been agreed is a massive step forward from whatever point of view you take."
She said she hoped the disagreement over fixed targets for renewable energy sources could be resolved during the second day of the summit.
"We talked about specific obligations - increasing energy efficiency, bio fuels, renewable energy. There is a need for further discussion on these three areas," she said.
The proposal to increase the share of power from renewables - including wind, solar and hydroelectric sources - to 20% by 2020 has met with considerable opposition.
French President Jacques Chirac has demanded that nuclear power be considered part of the plan.
Jose Manuel Barroso and Angela Merkel back tough targets
Mrs Merkel said that nuclear energy is not renewable energy but has conceded that it may be considered as part of the overall carbon reduction plan.
Poorer Eastern European countries, which are more dependent on heavy industry and carbon-heavy coal, said they would struggle to make the investment in wind farms and solar power necessary to meet the targets.
Ahead of the summit, EU Commission President Jose Manuel Barroso said that the EU's credibility hung on its matching words with action to fight climate change.
He said the summit could be "a defining moment for the EU", in which it proved itself the pace-setter in the race to rein in global warming.
"Only if we take the initiative are we able afterwards to engage the rest of the world," he added.
It is thought the EU could offer to extend its 20% target for emissions cuts to 30% if other heavy polluters like the US, China and India come on board.
Mr Barroso also wants to sharpen competition in the European energy market, by breaking up energy giants like those in France and Germany and dividing power producers from distributors.
"I believe that only with that separation we can create more choice for consumers [and] more attractive conditions for investment," Mr Barroso said.