The impact equates to an area the size of the Republic of Ireland.
As a result, the extra biofuels that Europe will use over the next decade will generate between 81 and 167 percent more carbon dioxide than fossil fuels, says the report.
Nine environmental groups reached the conclusion after analyzing official data on the European Union's goal of getting 10 percent of transport fuel from renewable sources by 2020.
But the European Commission's energy team, which originally formulated the goal, countered that the bulk of the land needed would be found by recultivating abandoned farmland in Europe and Asia, minimizing the impact.
New science has emerged this year casting doubt on the sustainability of the 10 percent goal, but EU energy officials have argued that only around two thirds of that target will be met through biofuels, with the balance being vehicles powered by renewable electricity.
But 23 of the EU's 27 member states have now published their national strategies for renewable energy, revealing that fully 9.5 percent of transport fuel will be biofuel in 2020, 90 percent of which will come from food crops, the report says.
The EU's executive Commission is now considering whether to tweak legislation to take account of the emerging science.
This year's fractious quest to understand the impact of EU biofuels policy has already led to allegations of bias, court action against the Commission and warnings that the probes will kill the nascent industry.
The debate centers on a new concept known as "indirect land-use change."
In essence, that means that if you take a field of grain and switch the crop to biofuel, somebody, somewhere, will go hungry unless those missing metric tones of grain are grown elsewhere.
The crops to make up the shortfall could come from anywhere, and economics often dictate that will be in tropical zones, encouraging farmers to hack out new land from fertile forests.
Burning forests to clear that land can pump vast quantities of climate-warming emissions into the atmosphere, enough to cancel out any of the benefits the biofuels were meant to bring.
The indirect effects of the EU's biofuel strategy will generate an extra 27 to 56 million metric tones of greenhouse gas emissions per year, says the report. In the worst case, that would be the equivalent of putting another 26 million cars on Europe's roads, it added.
The UK, Spain, Germany, Italy and France are projected to produce the most extra greenhouse gas emissions from biofuels, generating up to 13.3, 9.5, 8.6, 5.3 and 3.9 extra million metric tones of carbon dioxide per year respectively.
But the whole picture is far more complex.
The European Commission's energy team says shortfalls in grain can be avoided in several ways, including by improving farming yields and cultivating abandoned land.
"The EU has a sufficient amount of land previously used for crop production and now no longer in arable use to cover the land needed," said a statement from the Commission's energy department. "It makes sense to bring this land into use."
Biofuels producers also argue that European Union officials should not alter biofuel-promoting policies to take account of the new science, as it is still too uncertain.
"Any public policy based on such highly debatable results would be easily challengeable at the World Trade Organization," says Emmanuel Desplechin, of the Brazilian Sugarcane Industry Association (UNICA).
The report was compiled by ActionAid, Birdlife International, ClientEarth, European Environment Bureau, FERN, Friends of the Earth Europe, Greenpeace, Transport & Environment, Wetlands International.