A clear majority of parliament's environment, public health and food safety committee has adopted a second reading agreement on biofuels, with 51 votes in favour and 12 against.
Back in February, MEPs had approved plans to enter into negotiations with council, hoping to cap the use of first generation biofuels - which are made from food crops - at six per cent of final energy consumption in transport by 2020.
The EU aims to have 10 per cent of its transport energy come from renewable sources, such as biofuels.
In 2012, the commission had proposed a five per cent cap, but member states suggested this be increased to seven per cent. While European deputies were initially against the idea, they have now approved this figure.
First generation biofuels have been heavily criticised because they are produced on farmland, reducing the space available to produce food and resulting in deforestation to free up land. This is known as indirect land use change (ILUC), which contributes to greenhouse gas emissions, defeating the point of using biofuels as an eco-friendly alternative to traditional fuels.
"We had to make an unsatisfactory yet responsible decision in support of the compromise - a rejection would have either left us with an even weaker outcome from the conciliation procedure or with no new legislation at all" - Matthias Groote
Under the new agreement, fuel suppliers and the commission will be required to report on ILUC emissions.
Christofer Fjellner, who represented parliament's EPP group in the negotiations, was pleased with the agreement, calling it "an important reform of new advanced biofuels in Europe without hampering the use of climate-effective ethanol and biodiesel".
He added that he was "relieved" by the outcome of the vote, highlighting that "without a reform, the expansion of renewables in Europe would have been halted for the next five to 10 years".
Yet not everyone was as enthusiastic. Seb Dance, S&D group spokesperson on the issue, said, "we would have liked to go further", and accused council of having "decided to give very little ground on this package, but to bend to the will of a strong industrial lobbying operation, to a point where trilogues were almost a charade".
Meanwhile, Matthias Groote, S&D group spokesperson on climate, environment and food safety, explained, "we had to make an unsatisfactory yet responsible decision in support of the compromise - a rejection would have either left us with an even weaker outcome from the conciliation procedure or with no new legislation at all".
Most unimpressed of all were the Greens, with group climate spokesperson Bas Eickhout calling the agreement "a major missed opportunity [that] falls far short of what is required to address the myriad of problems with the EU's biofuels policy".
In his view, the seven per cent cap on traditional biofuels "is clearly too high and will allow for further increasing the large share of climate-damaging biofuels in our fuel mix".
Environmental campaigners were also critical of the deal. Pietro Caloprisco, senior policy officer at Transport and Environment, said, "after years of industry and member state lobbying, this agreement is far weaker than the commission's original proposal".
Robert Wright, secretary general of ePURE, which represents the European renewable ethanol industry, commented, "while today's vote is a first step to providing some policy certainty to the industry, the result does not sufficiently incentivise the use of biofuels with better greenhouse gas performance".
Nevertheless, Faustine Defossez, the European environmental bureau's senior agriculture and bio-energy policy officer, welcomed the decision to cap the use of land-based biofuels, explaining that this was "long-overdue; [they] are bad for the climate, for people and for the environment and we should limit their share in our renewable energy mix".
The text will now be discussed at the upcoming April plenary session.