A Green Party bill that sets up a standards regime for biofuels sold in New Zealand passed its first reading in Parliament tonight with the Government's support.

Jeanette Fitzsimons drafted the member's bill and said it would rule out biofuels produced from food crops and those that were made in ways that destroyed animal habitats.

"The idea that it's okay to feed good human food like grains into motorcars while people are starving shows what happens when you pursue a single-minded goal and exclude all other considerations," she said.

"When it comes to competition between the fuel tanks of the wealthy and the mouths of the hungry, it's obvious who is going to win."

The bill does not distinguish between imported and locally produced biofuel.

Both have to meet the sustainability standards which meant foreign farmers would not be subsidised by having their products sold in New Zealand, Ms Fitzsimons said.

Energy Minister Gerry Brownlee said standards were needed although they would affect a very small part of the fuel industry.

He said the bill would allow New Zealand producers to put a stamp on their products confirming they were produced from sustainable sources.

It has been sent to the environment select committee and the aim is to have the regime in place by the beginning of next year.