Ruth Kelly, Secretary of State for Transport, will be slowing down the annual increase in renewable energy targets in transport fuels.

Announcing the findings of the Gallagher Review this afternoon, Ms Kelly said there had been an increasing number of questions about indirect, less tangible affects from the production of biofuels.

She said the government would “amend rather than abandon” its policy to encourage the use of biofuels through a rising target, warning that an uncontrolled biofuels sector could impact on food prices and the destruction of the rainforest.

She recommended a “cautious approach”, saying there would be a consultation on reducing existing targets from an annual 1% increase, to a level where it would reach only 5% by 2013/14.

Ms Kelly said there would now be a consultation on the matter, and a consultation on the 2013/14 review in 2011/12. However, she said that there would not be a moratorium on biofuels, that doing so would hamper investment in clean biofuels technology.

“The report confirmed that biofuels can play a role in tackling climate change,” she insisted, “and I quote: ‘there is a future for a sustainable biofuels industry’.”

The Secretary of State went on to say that the Gallagher review considered a real need for caution with the European target of 10% renewable energy in transport fuels by 2020. She said the Gallagher report suggested a target in the region of 5-8% by 2020 would be more appropriate.

The Gallagher report said the 10% target could still be appropriate if it is accompanied by tough sustainability criteria, and Ms Kelly promised a “rigorous” review of such rules. But, she said later in the debate that the government will be pushing for a “conditional rather than binding” EU target for 2020 - conditional on the availability of biofuels that do not have indirect effects.