"This clean, renewable source of energy has the potential to help us respond to the dual climate change/energy security challenges we face," EU External Relations Commissioner Benita Ferrero-Waldner said.

"But we cannot afford to turn a blind eye to the potential drawbacks," she told an international conference in Brussels on the use of biofuels, increasingly seen as a green alternative to fuels derived from oil and gas.

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

However Ferrero-Waldner said that the drawbacks of fuels made from biomass -- which the Commission maintains is set to quadruple in coming years -- had to be carefully monitored.

"Poorly managed production can increase rather than decrease greenhouse gas emissions," she said.

"We know about the negative effects on soil protection, water management, bio-diversity, air protection and the world's forests. Clearly, production must be compatible with our overall environmental objectives."

In addition to the environmental impact, the Food and Agriculture Organization warned on Wednesday that rising reliance on biofuels over the next decade threatened to drive up food prices in poor countries, where they are already facing upward pressure from consumer demand.

The FAO, in a joint report with the Organisation for Economic Cooperation and Development, said that between now and 2016 substantial amounts of maize in the United States, wheat and rapeseed in the European Union and sugar in Brazil would be needed for ethanol and bio-diesel production.

On Thursday, Energy Commissioner Andris Piebalgs said that "minimum sustainability standards" for the production of biofuels had to be set.

"Only biofuel which meets these standards will be counted towards the 10 percent target and so only these biofuels will be allegible for support schemes, particularly for tax exemption," he said.

"These rules will apply equally on domestic produced biofuel and also to imports," he said, adding: "We need to ensure our biofuel standards and those of our trading partners create no unnecessary obstacles."

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 Amazonia, 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.

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