In the rush to develop biofuels, forests are burned in Asia to clear land for palm oil, and swaths of the Amazon are stripped of diverse vegetation for soya and sugar plantations for ethanol.
On Friday, a Dutch committee will unveil stringent criteria for growing biofuels in ways that don't damage the environment or release more greenhouse gases than they save.
Other European countries are working along similar lines and closely watching the Dutch initiative - the first to reach the level of government consideration.
More than a year in the making, the report reflects a heightened awareness of the risks and complexity in efforts to reduce emissions of the gases blamed for global warming.
Among the criteria in a draft obtained by The Associated Press: Production of biomass cannot contribute to deforestation, deplete reservoirs of carbon captured in the earth, compete with food crops, degrade soil or water supplies, upset biodiversity or displace local populations.
The report is by the Cramer Commission, named for its former chairwoman, Jacqueline Cramer, who in February became environment minister.
Without going into specifics, it suggests developing a track-and-trace system to follow a product from plantation to power plant, like an express delivery package.
"It should be implemented on a European scale because it will be difficult for Holland to do it on its own," said Kees Koede, of the Dutch branch of Friends of the Earth, an environmental group.
"Everyone is aware that it's crazy to pour money into a system that is not sustainable," he said.
But the European Commission, executive arm of the 27-nation European Union, is only beginning to look at the problem.
"We are working on a system of green certificates to make sure no unsustainable biofuel makes its way into the European market. But this is very embryonic at the moment," said Ferran Tarradellas Espuny, an EU energy official.
The campaign is driven by evidence that developers in the two Asian countries have burned vast tracks of rain forest to grow palm oil. The fires unleash millions of tons of carbon dioxide and smoke that shroud entire areas of Southeast Asia in eye-watering smog for weeks at a time.
The Netherlands is Europe's biggest importer of palm oil, used in a wide range of supermarket products as well as a fuel oil supplement. One Dutch company has plans to build three 50 megawatt power stations exclusively running on palm oil.
The Cramer Commission envisions imported biomass from sustainable sources by 2020, but calls for a transition period.
"Sustainability in the long term can only be achieved if a start is made with it now," the draft says.
It calls for greenhouse gas emissions to be cut by 70 percent for generating electricity, and 30 percent for transportation fuels.
The draft criteria say new plantations must not be built in protected areas, plantations should leave 10 percent of their area in "its original state" to preserve diversity, and soil and water quality of the soil and water should be improved.
The Europeans have set high targets for cutting carbon emissions. In February, EU leaders approved a plan to trim them by at least 20 percent from 1990 levels by 2020. At least 10 percent of transport fuels will come from biomass, they decided.
With that goal in mind, a huge emphasis will shift toward biofuel production, risking even greater environmental damage.
"You need to be very quick with implementing criteria," said Sander van Bennekom of the Oxfam charity, one of the report's 14 contributors, in an interview. "Maybe we are already too late."