EU imposes diet on food-for-fuel quotas

* Green politicians voted against the compromise

* Makers of new-style biofuels say compromise too weak

* Formal EU parliament backing seen as done deal

By Barbara Lewis

BRUSSELS, April 14 (Reuters) - EU politicians backed a deal on Tuesday to limit the amount of crop-based biofuel that can be used in the transport sector, drawing a line under years of debate over a fuel source criticised for doing more harm than good.

Green campaigners and representatives of a new generation of biofuels complained that the deal did not go far enough, but said that it nonetheless marked recognition that the European Union must look beyond using food for fuel.

Tuesday's vote in the European Parliament's Environment Committee endorsed a compromise agreed at the start of this month to limit the amount of crop-based biofuels to 7 percent. The accord still needs the backing of the full parliament, but that is seen as a formality.

The current law requires EU member states to ensure that renewable sources account for at least 10 percent of energy in transport by 2020.

Since that target was set, scientific research has shown many crop-based biofuels, such as those from maize and rapeseed, can cause damage. Apart from driving up food prices, using farmland to produce biofuels adds to pressure to free up land through deforestation, which can result in increased greenhouse gas emissions.

Those seeking to promote a new generation of advanced biofuels made from seaweed or waste favoured a tighter limit on traditional biofuels.

But member states held out for 7 percent and those who have invested in biofuels made from crops said too low a cap would put jobs at risk.

Although the Environment Committee on Tuesday backed the compromise, Green politicians voted against it. They said a 7 percent cap was too high and called on the European Union to shun the use of food crops for fuel altogether.

Novozymes (Other OTC: NVZMF - news) , which supplies enzymes for the production of conventional and advanced ethanol, said the compromise lacked ambition and did not provide sufficient incentives to encourage a new generation of non-food-based biofuels.

"I fear other regions (of the world) once again, because they have more boldness and ambition, will take the lead by creating the political certainty we need," Sebastian Soderberg, a vice president at Novozymes, told Reuters by telephone.

Industry body ePURE, which represents the bioethanol lobby, said the deal was too weak, but at least marked "a first step" to providing some certainty for the industry in the European Union. (Reporting by Barbara Lewis; Editing by Crispian Balmer)