Abstract In 2001, the European Commission (hereafter “EC”) formulated an ambitious target of 21% of total community electricity consumption to be generated with renewable energy sources by 2010. Moreover, national indicative targets per Member State were specified. In practice, the latter are implemented in all Member States as national production targets, achievable exclusively through an increase of the domestic production of electricity produced from renewable energy sources (hereafter “RES-E”). However, in this article it will be shown that this is not in line with the EC's intent. Looking at the legislative process resulting in the Directive on the promotion of RES-E, it is demonstrated that instead the EC aimed for European trade in renewable electricity through national consumption targets. It is shown that the legislative process has resulted in confusion on both the nature (absolute or proportional figures) and the subject (consumption or production) of the RES-E targets that are being aimed for. Despite the EC's attempt to clarify this confusion, the reality of national production targets remains, hindering the attainment of the European RES-E target in the most cost-efficient manner.