Its authors recommend the targets should be lifted temporarily until new safeguards are put in place for biofuels grown in Europe or imported.
But they stop short of calling for a complete halt to biofuels, which some environmentalists want.
And they hold out the hope that new technologies may be able to develop biofuels from cellulose.
Crucially, they hope this could be done in a way that does not damage the environment or compete with food crops.
However, they acknowledge that progress towards these new biofuels is too slow, and that the next-generation fuels available are too expensive.
They want governments to do more to encourage biofuels that use less land, fertiliser and pesticide.
The Council is an independent body that was set up 20 years ago to ponder ethical issues raised by developments in biology and medicine.
It has been studying biofuels for 18 months – specifically relating to the EU Renewable Energy Directive target that biofuels should account for 10% of transport fuel by 2020, a much-criticised mandate originally designed as part of Europe's strategy to combat climate change.
Based on what it says is a set of ethical values which will be widely shared, the report says biofuels should:
not be at the expense of human rights;
be environmentally sustainable;
contribute to a reduction of greenhouse gases (some currently increase greenhouse gases);
adhere to fair trade principles;
have costs and benefits that can be distributed in an equitable way.
