Brussels – Anti-poverty group Oxfam International on Tuesday urged the world's poorest nations to think twice before jumping on a biofuel boom that could drive farmers off their land and hit food supplies.
In a report, campaigners recommended that developing countries "move with extreme caution" before embarking on any broad push to increase output of energy crops such as palm oil.
It said biofuel exports to Europe and the United States may be lucrative but the potential economic, social and environmental costs are "severe."
Oxfam said governments need to set safeguards to make sure small farmers are not thrown off their land and that food crops continue to be grown.
The report said Indonesia has seen sharp price rises for palm oil which local people use as a staple cooking oil as the government sets aside 40 percent of output for biofuel.
It warned that this may worsen because both Indonesia and Malaysia want to produce more palm oil to supply a fifth of Europe's future biofuel demand.
Oxfam is calling on the European Union to scrap a target for biofuel to replace a tenth of transport fuel by 2020. It says the target will not fulfill Europe's goal of either reducing greenhouse gas emissions or cutting its dependence on imported oil.
"Biofuels currently provide a solution neither to the oil nor to the climate crisis, and are now contributing to a third: the food crisis," Oxfam spokesman Robert Bailey told reporters.
The group claims that biofuels are partly responsible for hikes in food prices and are to blame for dragging some 30 million people worldwide into poverty.
Europe appears to be rethinking its target. EU leaders last week called for a careful assessment of how using more biofuels might affect global food production.
However, some voices see biofuels as a huge opportunity for developing countries.
Brazilian President Luiz Inacio Lula da Silva says the biofuel boom creates a profitable export for energy crop producers in Africa, Central America and Caribbean that would allow them to claw their way out of poverty.