Plant sources such as wood must be used for energy if the UK hopes to meet its targets to slash greenhouse gases.
However using biomass at any higher level could undermine efforts to save carbon, for example if growing energy crops shifts food production on to land cleared from forests.
By using biomass there may be "trade-offs" with other environmental aims such as protecting wildlife and habitats.
"The extent to which bioenergy should contribute to economy decarbonisation is highly controversial," said committee's chief executive David Kennedy.
"Our analysis shows that there is a crucial role for bio-energy in meeting carbon budgets, but within strict sustainability limits - and trade-offs with wider environmental and social objectives may be needed.
"Strengthening of regulatory arrangements is required both here and in Europe to provide confidence that bio-energy used over the next decade is sustainable."
The UK has committed to legally binding goals to cut greenhouse gases by 80 per cent on 1990 levels by 2050.
The amount of energy coming from biomass must rise from current levels of two per cent to 10 per cent if the UK plans to meet that goal, the committee said.
Technology to capture and permanently store the carbon from burning biomass in power stations or industrial plants is needed to remove extra greenhouse gases from the atmosphere in order to meet the UK's tough emissions reduction targets.
Wood should be used more in the construction of buildings, to store carbon in the fabric of homes and offices and reduce the high emissions which come from using cement or steel.
However Kennedy warned that current regulations on biofuels for transport and biomass did not ensure the energy sources, such as wood from Russian forests, were sustainable.
He urged the government not to set any new targets on sourcing a certain amount of fuel from plant sources, and meeting those which have already been set - including by the EU - should be subject to whether they can be met sustainably.
While there was a role for biofuels in cars and vans over the next couple of decades, their use would be only "niche" by 2050, with the majority of emissions cuts in transport coming from switching to electric vehicles.
Government plans to provide subsidies to new large-scale biomass plants would not be cost effective, said Kennedy, with the electricity generated costing almost as much as offshore wind.
Converting old coal power stations to biomass or "co-firing" of wood alongside coal were much more cost-effective options as they had little in the way of capital costs and should, along with small-scale plants, be the focus of subsidies.
"We might have to make some difficult trade-offs" he warned. "If carbon is the objective we might have to trade off a little with biodiversity.
"We should not pretend there's a benign way of meeting carbon budgets if that's not the case."
The report comes after a UK Energy Research Centre study revealed that a fifth of global energy could come from biomass without damaging food production, if the best use is made of waste products from agriculture and energy crops.
"Bioenergy can be part of the solution to our addiction to dirty fossil fuels that cause such damage to the environment, but they have to be the right solutions," said Dr Doug Parr from Greenpeace.
"We have to avoid sprinting towards a bioenergy industry that relies on chopping down forests that will damage the ecosystem.
"Nor will the solution to our clean energy needs be found in mass imports impacting communities in both developed and developing countries."
The government must have an "ethical and sustainable" approach to the expansion of bioenergy, or the UK would just end up transferring its problems to other parts of the world, he added.
Harry Huyton, RSPB head of energy and climate change policy, said a review by the wildlife charity had found 32 biomass plants were in development, with four fifths of the fuel they were planning to burn set to be imported, from forestry markets in Canada, Russia and the United States.
He called for the removal of subsidies for large scale biomass electricity.
"The government must take an evidence-based approach to the industry, supporting only those schemes that offer genuine climate benefits," he warned.
"If they fail to do so then public money will be used to prop up a fundamentally unsustainable, damaging industry."
David Norman, WWF-UK's director of campaigns, said that at the current UN climate talks in Durban, South Africa, delegates were hearing of the problems which could occur when biomass projects were done badly.
"Therefore, if biomass is to play a significant role in helping to tackle climate change in the UK then it is vital that existing rules are strengthened to ensure that any development takes place in a truly sustainable way," he said.
"In addition to strong environmental and social criteria we need to see a full and transparent way of measuring the emissions and any potential greenhouse gas savings."