The Commission plan needs to be approved by member governments and the European Parliament before becoming law, which could take up to two years.

The announcement came shortly after international NGO Oxfam released The Hunger Grains, which demonstrates that Europe's hunger for biofuels is pushing up global food prices and driving people off their land, resulting in deeper hunger and malnutrition in poor countries.

"In 2008 biofuels accounted for 3.5 percent of all transport fuels in the EU, that same year, the land that was required to grow crops for those biofuels could have fed 127 million people," said Ruth Kelly, Oxfam's economic policy advisor, and author of Oxfam's new report.

Data gathered by Oxfam shows land acquired for biofuels production and export in the Philippines could produce up to 2.4 million metric tonnes of rice, enough to make the country self-sufficient in rice production.

European Energy Commissioner Oettinger recognised that current EU policy lead to "unfavourable developments such as the tearing down of rainforest to produce biofuel."

"It is wrong to believe that we are pushing food-based biofuels, our clear preference is biofuels produced from non-food feedstocks, like waste or agricultural residues such as straw," wrote Oettinger and Climate Commissioner Hedegaard in a joint statement.

"I'm happy the EC is finally recognising the fact that the use of food-crops for fuel is problematic," says Ruth Kelly, adding: "EU governments and the European Commission must resist the backlash from industry and farming lobbies that have grown fat on the massive subsidies and tax exemptions while poor people go hungry and consumers' money get wasted."