Changes are expected to be enforced from October 2012 and have been welcomed by environmental groups but has fuelled fears of dampening investments in the sector.

EU energy and climate commissioners Gunther Oettinger and Connie Hedegaard will propose that member states can meet their 5% bio-fuel targets by first-generation bio-fuels while the remaining 5% must come from waste or agricultural residues that do not compete with food crops.

"We are pushing biofuels that help us cutting substantial CO2-emissions, do not compete with food and are sustainable and green at the same time," the commissioners said in a joint statement.

In a related development, French PM Jean-Marc Ayrault has announced that the country will cap its usage of first generation bio-fuels in the transportation sector to 7% by 2020.