European plans to promote so-called biofuels, fuels made from sugar or vegetable oils, have come under attack.
As oil prices rise carmakers are eager to push cheaper bio-fuels
Climate change experts claim that far from being environmentally friendly, the new fuels in fact pose a threat.
They argue demand for biofuel crops is leading to tropical forests being cut down for palm oil.
Meanwhile, the EU has conceded that it will miss its target of getting 5.75% of transport running on such fuels by 2010.
"We can say that the most advanced country is Austria with 2.5% of the target that they have reached in 2005, but there are other countries that have done very poorly - for instance the UK or Finland," European Commission (EC) energy spokesman Ferran Tarradellas told the BBC.
UK farmer Peter Kendall, who supplies the raw material for bio-fuels, agreed that his country is doing particularly badly, with just 0.3% of cars using the fuel.
In comparison, ethanol now makes up 20% of Brazil's fuel market, according to World Bank figures.
Biofuel technology has been up and running in South America for more than 30 years - meaning the technology is much more sophisticated, with more than 40 million tonnes of maize fermented to provide ethanol for fuel.
However, most biofuels in the UK are provided by imports, some of which comes from producers whose green credentials are questionable, Mr Kendall said.
"What we are waiting for at the moment is a proper accreditation scheme to make sure that we don't actually just feed this obligation from depleting Malaysian palm growers for example or even contributing to the pressure on land use in Brazil," he added.
The EC has vowed to review the situation this year, and hopes to introduce a system that guarantees biofuel crops are "not damaging sensitive environments".
But climate change experts have warned the moves may be too little too late.
"It seems to me that biofuel is an easy way to try and deal with the problem of increasing greenhouse gas emissions, because it allows people to continue using their cars and it allows us to continue in living in very unsustainable ways," said Mark Lynas, author of High Tide: News From A Warming World.
"When you look at the totality of the problem it's not going to bring emissions down at all, and it may even make things worse if we are talking about tropical forests being converted to palm oil production."
Cutting traffic growth by getting people out of cars is one of the only ways to reduce transport emissions and so tackle global warming, Mr Lynas added.