Britain's new generation of biomass power stations will have to source millions of tonnes of wood from thousands of miles away if they are to operate near to their full capacity, raising questions about the claims made for the sustainability of the new technology.

Ministers believe biomass technology could provide as much as 11% of the UK's energy by 2020, something that would help it meet its carbon commitments. The Environment Agency estimates that biomass-fired electricity generation, most of which involves burning wood pellets, can cut greenhouse gas emissions by up to 90% compared with coal-fired power stations. Eight biomass power stations, including one in a unit in the giant Drax power station, are operating in the UK and a further seven are in the pipeline. None operates near capacity.

But now environmental groups are questioning where the new plants will source their wood if the technology takes off. A campaign group, Biofuelwatch, calculates in a new report that the UK could end up burning as much as 82m tonnes of biomass each year – more than eight times the UK's annual wood production. If Drax were to operate at full capacity, it alone would get through 16m tonnes of wood a year, according to the report, which claims a Europe-wide demand for biomass is triggering a "gold rush" for wood pellets that could have implications for global land use.

The report highlights the example of Portugal, where 10% of the country is now covered by eucalyptus plantations much of which is used for biomass energy production. Two campaign groups, the Dogwood Alliance and the US Natural Resources Defence Council, have issued critical reports about the way that forests in the southern states of the US are being used for biomass production. There are also concerns that tracts of Brazil are being used to supply the wood pellets.

But the concerns have been fiercely rejected by the biomass industry. Enviva, which supplies Drax with wood pellets, said its biomass came mainly from offcuts from poor-quality trees that are left over from those grown for the construction and paper industries. It said it would be uneconomic to cut down forests purely for biomass and that the cost of shipping a tonne of wood pellets from the east coast of the US to the UK was similar to transporting the same amount some 225 miles within the UK. It said that even the most optimistic forecasts for global wood pellet demand suggested it would not exceed 40m tonnes – equivalent to 80m tonnes of wood – a year by 2020.

"Biomass is the only renewable energy source that can replace coal quickly and cost-effectively, providing the same operational benefits while dramatically improving the environmental profile of energy generation," a company spokesman said.

MGT Power, which is behind a proposed biomass plant on Teesside, potentially the largest of its kind in the world, told the Observer it had dropped plans to source its wood from Brazil, although it denied this was to do with sustainability concerns.

A spokesman said that biomass could be an important green technology for the UK. "We feel very strongly that biomass can provide energy at lower prices than offshore wind," the spokesman said.