(Adds lawmaker quotes)

By Pete Harrison

PARIS, July 4 (Reuters) - The European Union may get barely one-third of its target for biofuels in transport fuels from home-produced sources by 2020, requiring massive imports to meet the goal, a draft European Environment Agency report said.

The EU plans to source 10 percent of transport fuels from renewable sources by 2020, with the bulk of that seen coming from biofuels. Critics say the target will contribute to deforestation in developing nations and soaring food prices.

The report, sent to the bloc's 27-member states for comments and seen by Reuters, shows the most cost-effective and sustainable scenario for biofuels would deliver just 3.4 percent of the EU's transport fuels from domestic production in 2020.

An EEA spokeswoman said the report was at an early stage and was not scheduled for publication until September.

She declined to discuss details but said the final figure may be higher as the model does not factor in the effect of soaring oil prices, international trade or the fact that biomass may be diverted from power or heat generation to boost its use in transport fuels.

A key European Union lawmaker said on Friday he had broad parliamentary backing to propose changing the EU's target for biofuels so that 4 percent of road transport fuels come from renewable sources by 2015.

Claude Turmes told Reuters one-fifth of those renewable fuels would have to be either second generation biofuels or electric vehicles. There would be a major review in 2015 to decide whether to move towards an 8-10 percent target in 2020.

"Firstly this would slow down the rush into non-sustainable biofuels, and then it would create a real incentive for second generation biofuels," he said on the sidelines of a meeting of EU energy ministers.

WORLD BANK

The EU's headline goal has become increasingly controversial amid soaring global food prices and worries about deforestation, with Italy and France calling the objective into question.

A confidential World Bank report cited in Britain's Guardian newspaper on Friday said biofuels had forced global food prices up by 75 percent -- far more than previously estimated.

The EU is seeking to avoid such unwanted side effects by setting strict social and environmental criteria, including mechanisms to prevent biodiverse land being used for biofuels or indirectly causing deforestation by using up agricultural land.

A joint letter by biofuel producing nations to EU lawmakers this week supported the 10 percent goal, saying it was the best way to spur sustainable production.

The EU should be cautious about introducing legislation on issues which are not properly understood, said the letter signed by the Ambassadors of Argentina, Brazil, Indonesia, Malawi, Malaysia, Mozambique and South Africa.

"Questions for which there is still a significant level of uncertainty, such as indirect land use change, should be addressed at a future stage, as soon as there is enough scientific eveidence to do so," said the letter seen by Reuters.

"Provisions concerning the protection of biodiversity should be precise and should not disproportionately penalise countries rich in biodiversity with unjustified, wide-ranging restrictions on sustainable use of their territory," it added. (Reporting by Pete Harrison, editing by Paul Taylor and Ralph Boulton)

AlertNet news is provided by