The European Commission, the executive arm of the European Union, is proposing to sharply limit the use of biofuels derived from food crops, a move that shows a radical change in its biofuel policy and could threaten a 2020 target for using renewable resources in its transport sector.

According to a draft law seen by Dow Jones Newswires, the Commission is proposing that in 2020 the share of energy from food crop-based biofuels--such as rapeseed or palm oil--shall not be more than 5% of the final energy consumed in the transport sector.

EU member countries and the European Parliament will have to give their approval to the document, before it can become law.

The proposal clearly clashes with the target of having 10% of the energy used in transport coming from renewable sources by 2020--a goal that the EU set three years ago--because food crop-based biofuels account for most biofuels available in volumes at the moment. New types are being developed, but are mostly at the laboratory stage. At the same time, biofuels are expected to be the main renewable energy source to be used in transport in 2020.

Write to Alessandro Torello at alessandro.torello@dowjones.com

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(END) Dow Jones Newswires

September 11, 2012 07:24 ET (11:24 GMT)