A key panel of EU lawmakers yesterday voted to lower a target for using traditional biofuels from crops in petrol and diesel as part of the EU's plan to fight climate change.

The move could curb the growth of a market coveted by biofuels exporters such as Brazil, Malaysia and Indonesia, as well as European farming nations.

The executive European Commission has proposed that 10 per cent of all road transport fuel come from renewable sources by 2020, without specifying how much of that should be biofuels, renewable electricity or hydrogen.

Environmentalists attacked the policy, charging that biofuels produced from grains and oil seeds contribute to rising food prices and deforestation.

The European Parliament's influential industry committee endorsed the overall 10 per cent target but voted that at least 40 per cent of it be achieved with electricity or hydrogen from renewable sources, or second-generation biofuels from waste.

That would leave just six per cent coming from traditional biofuels made from grains and other food stocks.

"While the maintenance of a binding target for biofuels is a bitter pill to swallow, the committee has at least strengthened the safeguards against the damaging impact of agri-fuels in this directive," said Luxembourg Green MEP Claude Turmes who led negotiations in the committee.

The committee's decision will likely serve as Parliament's position in negotiations with the 27 EU member states later this year or in early 2009 to fine-tune the laws.

The panel approved a mid-term goal of five per cent of road transport fuel from renewable sources by 2015, of which a fifth should be alternatives to biofuels from food crops.

"That mid-term target could be difficult," said Simo Honkanen of Neste Oil's renewable fuels division. "I think biofuels from wood waste will come, but it will take years and it's still unclear how much they can contribute."