Clearing land and chopping down forests to plant biofuel crops often brings environmental problems that cancel out the environmental benefits of biofuel, the European Commission said.
Such land clearing releases the greenhouse gas carbon dioxide through plowing, and deforestation reduces available "carbon sinks," experts said.
The EU is trying to shift biofuel production from food crops to farm waste, algae and straw.
"We must invest in biofuels that achieve real emission cuts and do not compete with food," EU Commissioner for Climate Action Connie Hedegaard said.
The Commission will modify the 2009 Renewable Energy Directive and the 1998 Fuel Quality Directive to put a cap of 5 percent on food-based biofuel allowed in the renewable energy used in transport, the BBC reported Wednesday.