European Union policies to promote the use of biofuels for transportation will cost consumers as much as 126 billion euros ($166 billion) between now and 2020, two environmental groups said.

The fuels, derived from plants and a substitute for gasoline, probably won’t help cut emissions of greenhouse gases because forests are destroyed to make way for biofuel plantations, Friends of the Earth and ActionAid said today in an e-mailed statement.

The EU aims to get 10 percent of its transport energy from biofuels, hydrogen and renewable power by 2020. The target is meant to help reduce the bloc’s total greenhouse gas emissions 20 percent from 1990 levels. The lobby groups said those goals will add a cumulative 94 billion euros to 126 billion euros to fuel costs by 2020.

“Consumers and taxpayers are paying a premium for this policy, which achieves very little and we think causes a lot of damage to the environment as well as hunger and poverty,” Robbie Blake, biofuels campaigner for Friends of the Earth Europe. “What we really need to be focused on is reducing transport energy use by improving energy efficiency in cars and through better public transport.”

The EU has said its guidelines prevent the use of deforested land and that biofuels have little to do with rising food prices. The EU in June 2010 set up controls to prevent biofuels from damaging forests, wetlands and nature reserves.

An independent consultant, Malcolm Fergusson, carried out the cost analysis for Friends of the Earth and ActionAid. He extrapolated analysis relating to the costs in the U.K. and Germany across the EU. Fergusson was previously head of climate change policy at the U.K. government’s environment agency.