Biofuel makers must also prove they don't destroy rainforests or drain wetlands to grow the plants used to make the renewable energy fuels, the EU's executive European Commission said.
"Our certification scheme is the most stringent in the world and will make sure that our biofuels meet the highest environmental standards," energy Commissioner Guenther Oettinger said in the statement.
Environmental and development groups said the measures were still too weak and included loopholes that could hurt the environment and raise food prices.
The EU rules seek to guarantee all biofuels -- whether produced in the 27-nation EU or imported -- are sustainably made on land used for farming since 2008.
Certified biofuel-makers may apply for a quality mark reading, "Recognized by the European Union," and the commission could revoke any certificate if a biofuel supplier fails to provide truthful information.
The standards are to be checked by independent auditors, the commission said. But critics observed the audits are to be paid for by the companies themselves, EUobserver reported.
Greenpeace EU also said the commission's criteria didn't address the harm caused by "indirect land-use change," when formerly agricultural land, for instance, is set aside to grow biofuels, which creates pressure to cut down forests to grow food.
Growing biofuels often also raises food prices, placing an extra burden on impoverished communities in the developing world, development non-governmental organizations told the EUobserver.