"What we are going to propose are strict conditions that biofuels used in the European market are produced in a sustainable way," Commission spokesman Ferran Tarradellas told journalists.

However, he added that the exact conditions would not be decided until January 23, just before the Commission publishes wide ranging plans to help the European Union slash greenhouse gases to meet tough targets agreed in March.

EU leaders pledged then to increase renewable energy use by 20 percent by 2020, compared to 1990 levels, with biofuels to make up 10 percent of all transport fuels used by then.

However, since then concerns have risen about forests being cut to grow biofuels and soaring food prices caused in part by farmland being used for energy crops rather than growing food.

"We have seen that the environmental problems caused by biofuels and also the social problems are bigger than we thought they were. So we have to move very carefully," EU Environment Commissioner Stavros Dimas told the BBC Monday.

"We have to have criteria for sustainability, including social and environmental issues, because there are some benefits from biofuels," he said.

Ethanol (ethyl alcohol) is currently the only car fuel made in large quantities from biomass, under fast-expanding initiatives to wean industrialised economies from dirty, costly oil.

Biofuels are renewable and environmentally-friendlier than fossils but not completely clean. Energy has to be used to harvest and process the biomass, and this makes biofuels carbon-positive, not carbon-neutral.

Another concern is the environmental impact of converting land, especially in the Amazon region and Indonesia, to growing fuel crops. The rush to biofuels is also having an impact on some food prices as cornfields are given over to ethanol production.

A study by Britain's Royal Society warned Monday that biofuels may actually damage the environment.

"It is important to remember that one biofuel is not the same as another ... The greenhouse gas savings of each depend on how crops are grown and converted and how the fuel is used," said Professor John Pickett, head of the study.

"So indiscriminately increasing the amount of biofuels we are using may not automatically lead to the best reductions in emissions."

He added: "It's very important we don't aggravate the loss of natural habitat, that we don't just see this as a quick fix and drive into it for immediate gain."

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