The UK's proposal was to allow biofuels to count double. If it had gone through, the 2020 goal for 20% of energy to be sourced from renewable sources would have effectively been reduced to 19.6%.
The European Wind Energy Association (EWEA) has warned that such a move would damage confidence in the wind industry and block investment.
"Changing the legislation would have deterred investments and sent up risk premiums, making it more expensive to invest in renewables. This would have undermined the green growth, jobs and energy security wind energy and other renewables bring," said an EWEA spokesperson.
"Fortunately, the other member states realised how dangerous the UK proposal was for the EU and its economy," he added.
The reduction would have equated to up to 60.9TWh and a reduction in renewables investment of EUR 5.4 billion, according to an analysis by the UK government seen by Reuters.
Experts have warned that Britain is set to miss its own 15% 2020 renewable energy target, but have said that the EU as a whole is more likely to meet its 20% obligation.
The latest available official EU data showed Britain achieved a 3.8% green energy share in 2011.
It ranked 25 out of 27 of the EU member states that are being monitored in their progress towards meeting their individual targets.
In November, the UK government announced that it will boost subsidies to offshore wind while cutting support for both onshore wind and solar.