The government is being urged to back moves to curb the use of biofuels in Europe amid concerns they are causing hunger in poor countries and contributing to climate change.

The heads of Oxfam, ActionAid, Greenpeace and Friends of the Earth have written to ministers and MEPs calling on them support a cap on biofuels produced from crops such as sugar cane or palm oil.

They warn that EU backing for biofuels as an alternative to fossil fuels for transport is pushing up food prices and driving hunger because land is being used to grow crops for fuel instead of food.

Smallholder farmers in poor countries are also losing their land and livelihoods in "land grabs" as biofuel producers purchase areas to grow fuel crops for wealthy countries.

Biofuels being burned in European tanks are not necessarily green, as many produce similar or even greater greenhouse gas emissions – for example by fuelling deforestation to create land for the crops – than fossil fuels, the charities argue.

The EU has targets to source 10% of transport fuel from biofuels by 2020 but proposed legislation would limit food-based biofuels to 5% in a bid to address the problems in the policy.

The groups said it is essential UK politicians back proposals for a 5% or lower cap on biofuels that compete with food.

"It is also vital that the new legislation puts an end to those biofuels that could end up increasing global greenhouse gas emissions instead of reducing them," the charities said.

In a letter to ministers and British MEPs they said the UK had failed to set out its position on the cap or how to repair harm done to those going hungry because of the biofuels policy, despite David Cameron's promise to tackle global hunger during Britain's presidency of the G8 this year.

They called on the UK to end its silence and support a 5% cap with a view to eventually phasing out biofuels altogether.

The groups said: "The ugly reality of biofuels is that it is fuelling higher food prices, forcing poor people off their land and threatening the food security of millions in the developing world.

"The amount of food consumed as fuel by G8 countries annually could have fed more than 441 million people for a year, more than seven times the population of the UK.

"We are calling on the UK government and UK MEPs to end the madness of food being used to fuel cars while one in eight people go to bed hungry."