All significant investment in the sector would likely cease and dependency on oil will increase.

Clare Wenner, head of renewable transport at the REA, said: “The great irony is we have been repeatedly asking for a clear pathway to 2020, not least to secure investment in technological advancement.

“Nobody listened. Now Europe is planning a quantum leap which threatens to wipe us out.

“It is a double whammy and a galling prospect for companies that have invested millions of pounds in good faith.”

NFU chief combinable crops adviser Guy Gagen added: “At a time when fossil fuel costs are high, the cost of increasing our dependency on fuel imports from OPEC and others by removing biofuel mandates would be both financially and environmentally damaging.

“Biofuels represent the only realistic means of reducing Europe’s reliance on imported fuel and help address greenhouse gas emissions in the transport sector.”

If confirmed, the rules are expected to boost European consumption of ethanol, which currently accounts for just over 20% of the EU biofuel market, compared with biodiesel’s 78% share.

But with diesel cars accounting for about 60% of Europe’s fleet and rising, it is unlikely that increased ethanol consumption will be able to completely offset the likely decline in biodiesel production.