Senior European Union officials failed on Wednesday to agree on how to measure the full climate impact of biofuels, prolonging uncertainty in a debate that threatens to wipe out large parts of Europe's biodiesel industry.
The talks followed warnings from scientists that using biodiesel made from European rapeseed and imported palm oil and soybeans does nothing to prevent climate change and could actually accelerate it.
After more than a year of in-fighting within the European Commission, the bloc's 27 commissioners had been expected to choose between three main policy options at the meeting, but they failed to endorse any of them,
Discussions will now continue in an attempt to reach agreement on a proposal before the end of this year, EU sources close to the meeting said.
"The good news is that there appears to be a consensus in the Commission that the indirect impacts of biofuels need to be taken seriously," said Nusa Urbancic, a clean fuels campaigner for green transport lobby T&E.
"The bad news is, after several years, we are still waiting for a legal proposal to get out of the starting gate."
The debate centred on a relatively new concept known as indirect land use change (ILUC).
ILUC is a theory that states that by diverting food-crops into fuel tanks, biofuel production increases overall global demand for agricultural land. If farmers meet that extra demand by cutting down rainforest and draining peatland, it results in the release of millions of tonnes of additional carbon emissions.
Studies carried out for the Commission showed that the risk of ILUC is far greater for biodiesel - a diesel substitute typically made from oilseeds such as palm oil - than it is for bioethanol - a gasoline-substitute usually made from grain or sugar.
By estimating the ILUC emissions associated with each specific crop, scientists concluded that most biodiesel currently used in Europe emits more carbon than conventional diesel.
"It was a positive and good debate," EU climate spokesman Isaac Valero Ladron said. "There is a strong consensus on the need to act and address ILUC."
EU sources said the Commission's climate and energy department would continue to lead efforts to find a compromise but that the agriculture, trade and industry departments would be more closely involved in the talks than before.
That will be seen by some as a sign that tough EU proposals on ILUC are less likely, given that the agriculture and trade departments are known to oppose any measure that would exclude European or imported biodiesel from the EU mandates.