Ratings will be based on the "carbon intensity" of the energy production methods underlying a tariff, including the proportion of electricity generated from renewable sources.
"Currently, customers find it difficult to compare the environmental benefits of the various energy deals on offer," said Ofgem chief executive Alistair Buchanan.
The proposals have not been universally welcomed by consumer groups, however.
Both the National Consumer Council (NCC) and energywatch have acknowledged the need to clear up confusion about the environmental standards of different energy suppliers, but both organisations have warned that the scheme may not go far enough.
In particular, concern about the still-unclear definition of "low carbon" remains.
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