EU to limit controversial biofuels from 2020

"The Commission is of the view that in the period after 2020 biofuels should only be subsidised if they are not produced

from crops used for food and feed," the paper reads.

Current EU law requires ten percent of transport fuels to come from "renewable sources" such as electricity or biofuels by 2020, with the aim of reducing Europe's greenhouse gas emissions.

But the law has come under intense criticism as it indirectly contributes to a current hike in food prices, as less land is available for regular food crops. Soy and maize prices were at all-time highs in July, while the price of cereals and oil remained at peak levels in August.

Cutting forests to make room for more fields to grow biofuel crops is ultimately more damaging to the environment than their intended contribution to CO2 reduction.

"The aim of the current proposal is to start the transition to biofuels that deliver substantial greenhouse gas savings when also estimated indirect land-use change emissions are taken into account," the paper reads.

Oxfam, a London-based NGO fighting speculation in food prices, has estimated that land used to power European cars with biofuels for one year could produce enough wheat and maize to feed 127 million people.

Currently, EU subsidies for crops used for biofuels amount to about €30 per year for each adult. In 2008 alone, about €3bn were spent in tax exemptions and other incentives for biofuel production in the EU.

While the NGO welcomes the change in EU biofuels policy, they warn that waiting until 2020 is too long.

"EU biofuels mandates must be scrapped altogether now," Oxfam expert Marc Olivier Herman said in a press statement. He urged ministers to "resist the backlash from industry and farming lobbies" that will push for the cap to be removed.