Pressure on businesses to curb the use of crop-based biofuels cranked up another notch this week after two new reports suggested that booming European demand for biofuels is posing a threat to biodiversity.

According to a study from the European Environment Agency increased demand for fuel crops could have serious damaging impacts on wildlife, water and soils as more of Europe's agricultural land is handed over to biofuel production.

The study recommends that a range of policy measures are adopted to limit the risk to biodiversity, including targets to ensure at least 30 per cent of agricultural land is given over to environmentally oriented farming and the introduction of rules to ensure new fuel crops do not "require irrigation, intensive pesticide and fertilizer use" and are not grown in monoculture.

The report comes as new data from Defra suggests that demand for biofuels is already contributing to a reduction in wildlife habitats.

The Farm Business Survey found that the amount of farm land left uncropped is likely to fall by more than 50 per cent this year, prompting conservationists to warn that wildlife will come under an increasing threat.

The fall in uncultivated land is a result of an EU decision last year to reduce the amount of set aside farmland to zero as it seeks to ensure there is enough agricultural land to tackle rising food prices and meet its target to ensure 10 per cent of road fuel comes from biofuels by 2020.

Wildlife group the RSPB said that worrying government incentives for farmers to grow biofuels had contributed to the loss of habitat. The group said habitat loss of this scale would have significant impacts on wildlife, especially if it is repeated acrossa Europe. "We are extremely worried about what this means for wildlife," said Gareth Morgan, head of agriculture policy. "Especially as the European Commission have failed to put a realistic proposal on the table for anything to replace the wildlife benefits of set aside."

The research provides environmental groups with further ammunition as they campaign for a moratorium on biofuels made from fuel crops such as corn, sugar and palm oil. Researchers have repeatedly claimed that demand for biofuel is contributing to higher food prices and having an adverse affect on the environment through expansion of agricultural land, deforestation and increased water and fertiliser use.

Morgan urged the government to axe biofuel targets until clear standards were in place to ensure their production is environmentally sustainable. "There is not a system in place to limit the impact biofuels have on the habitat, so until there is, we would rather biofuel targets weren’t there at all," he said.