The EU is on the verge of a deal to boost renewable energy after resolving a battle over the controversial issue of biofuels yesterday, but Italy's demand for a review in 2014 prevented a final agreement.

"We have agreement on everything except the deletion of the review clause," the European Parliament's lead negotiator Claude Turmes told Reuters after closed-door negotiations.

The European Commission, which originates EU law, proposed in January that 10 per cent of all road transport fuel should come from renewable sources by 2020, mindful of climate change and the violent storms and rising sea levels it is expected to bring.

Much of that 10 per cent would come from biofuels, creating a huge potential market that is coveted by exporters such as Brazil and Indonesia, as well as EU farming nations.

But environmentalists charged that biofuels made from grains and oilseeds were pushing up food prices and forcing subsistence farmers to expand agricultural land by hacking into rainforests and draining wetlands - known as "indirect land-use change".

The stand-off over biofuels ended with an agreement that up to almost a third of the EU's 10 per cent goal would be met through electric cars and trains.

The European Commission will come forward with proposals in 2010 to limit indirect land-use change, and biofuels from non-food sources will be promoted with a "double bonus" scheme.

The provisional deal will need approval by the European Parliament and all 27 EU nations before becoming law, but is not expected to change much.