'Damning verdict'

The cost-benefit study looks at whether using biofuels reduces greenhouse gas emissions, improves security of supply and creates jobs.

It delivers an unenthusiastic opinion on all three counts.

The report said: "What the cost-benefit analysis shows is that there are better  ways to achieve greenhouse gas savings and security of supply enhancements than to produce biofuels. The costs of EU biofuels outweigh the benefits."

EU taxpayers would have to pay an extra $48bn to $95bn between now and 2020 if the commission proposals go ahead, according to the study.

Adrian Bebb, agrofuels campaign coordinator for Friends of the Earth Europe, called it "a damning verdict on the EU's policy for using biofuels."

"The conclusions are crystal clear, the EU should abandon biofuels and use its resources on real solutions to climate change," he said.

Ferran Tarradellas Espuny, the commission's spokesman on energy, stressed that the study was just a working paper and one of several opinions being taken into consideration as talks continued ahead of Wednesday's decision.

But he made clear that that the 10 per cent biofuels objective for vehicles remained.

He said: "Economically speaking there is only one option, that is  biofuels. It is good for the environment, it is good for transport and it is good for European agriculture."

Forest fears

On agriculture, the study warns that the proposed EU measures will require the use of huge swathes of land outside of Europe and it questions whether it will make any greenhouse gas savings at all.

Green groups warn that the EU plans could lead to forest clearances for biofuels or for food crops displaced by biofuel plantations as farmers switch over.

The report concludes that by using the same EU resources of  money and biomass, significantly greater greenhouse gas savings could be achieved by imposing only an overall biomass-use target instead of a separate one for transport.

The study said: "The uncertainties of the indirect greenhouse effects, much of which would occur outside the EU, mean that it is impossible to say with certainty that the net greenhous gas effects of the giofuels programme would be positive."

The commission's plans for biofuels are part of a broader energy strategy to cut down on greenhouse gases to be unveiled at Wednesday's meeting.

EU leaders have pledged to increase renewable energy use by 20 per cent by 2020, compared to 1990 levels, with biofuels to make up 10 per cent of all transport fuels used by then.