The Transatlantic Trade and Investment Partnership (TTIP) deal between Washington and EU member states has been touted to promote energy efficiency and eco-power.
But the latest draft text seen by the UK outlet intends to scrap binding energy saving measures and discourage electricity production from renewable sources.
According to The Guardian, it will oblige signatory countries to rely on self-regulation of energy industry and "reduce or eliminate trade and investment distorting measures" in developing world, where EU countries have protections in place to curb logging and fossil fuel extraction.
"These proposals are completely unacceptable. They would sabotage EU legislators’ ability to privilege renewables and energy efficiency over unsustainable fossil fuels," Claude Turmes, the Green member in the European Parliament, told the newspaper.
TTIP negotiations have been held behind closed doors since 2013. A fourteenth round of talks is scheduled to begin on Monday.