"Biomass production should not come at the expense of environmental damage and it should lead to less emissions of greenhouses gases than fossil fuels," the report said.

"The production of biomass must not endanger food needs and should contribute to the prosperity of local communities."

Global production of biofuels and power generated directly from the use of biological materials called "biomass" have soared as countries look for alternatives to fossil fuels to fight climate change and solve energy security problems.

But environmentalists say burning tropical forests to clear plantations to produce palm oil or sugar would more than offset that environmental bonus. Biofuels are also in direct competition with food needs over raw materials.

The Dutch report recommends a track-and-trace system to follow a product from a plantation to an energy plant but does not give details.

The report is prepared by representatives of non-governmental organisations, research institutes, and energy and food companies, including Shell and Unilever.

Cramer said she would soon discuss the recommendations with the industry.

The new Dutch government, which took over in February, wants to raise the share of renewable energy to 20 percent by 2020 but has yet to come with a detailed policy how to do that.

The previous Dutch cabinet drew criticism for its decision last August to freeze all subsidies for new green energy projects, which it said was motivated by the fact that a multi-year subsidy budget of 8.2 billion euros was depleted.