 European Union ministers tackle controversial proposals to shake up power companies and set targets for renewable fuels on Thursday in a step towards forming a common EU energy policy and fighting climate change. The European Commission in January proposed measures to cut greenhouse gas emissions, boost the production of energy from environmentally-friendly sources and separate distribution networks from the generation activities of big gas and electricity companies. But EU states are divided over whether to make targets for renewable energy sources binding. They are also split on how far to go in separating, or "unbundling", utilities' generation and distribution businesses. EU Energy Commissioner Andris Piebalgs reiterated late on Wednesday the Commission's preference for full "ownership unbundling," which would require companies to separate the two activities by selling off one business. In a nod to EU governments that oppose such a shake-up, the EU executive has also proposed a second option in which utilities hand over management of their distribution grid operations while retaining ownership. Piebalgs said the Commission was open to a third proposal by France for "regulated unbundling", similar to the French system. Britain describes that option as maintaining the status quo. Draft conclusions prepared for the energy ministers' meeting and obtained by Reuters do not endorse a specific plan. They call on the Commission to elaborate on its proposed measures. Separately, the Commission has proposed that less-polluting renewable energy sources, such as wind, should make up 20 percent of the bloc's energy mix by 2020 and that biofuels account for at least 10 percent of fuel used by vehicles by the same year. Ministers will discuss whether to make those targets binding or not. The draft conclusions leave that question open. The Commission says non-binding targets do not work. Germany, current holder of the EU's rotating presidency, supports a mandatory target. But Britain says mandatory goals would prevent EU nations from determining their own energy mix and could be counterproductive. At present the European Union has a non-binding goal to increase renewable fuels to 12 percent of the energy mix by 2010, but that is likely to be missed. The Commission has also proposed to cut EU greenhouse gas emissions by at least 20 percent by 2020 compared with 1990 levels, with the possibility of raising that to 30 percent if other developed nations join in. EU environment ministers will address those goals at a meeting next week.