A UN report warns that a hasty switch to biofuels could have major impacts on livelihoods and the environment.
Plantations for biofuels may threaten forests and wildlife
Produced by a cross-agency body, UN Energy, the report says that biofuels can bring real benefits.
But there can be serious consequences if forests are razed for plantations, if food prices rise and if communities are excluded from ownership, it says.
And it concludes that biofuels are more effective when used for heat and power rather than in transport.
"Current research concludes that using biomass for combined heat and power (CHP), rather than for transport fuels or other uses, is the best option for reducing greenhouse gas emissions in the next decade - and also one of the cheapest," it says.
The European Union and the US have recently set major targets for the expansion of biofuels in road vehicles, for which ethanol and biodiesel are seen as the only currently viable alternative to petroleum fuels.
The UN report, Sustainable Bioenergy: A Framework for Decision Makers, suggests that biofuels can be a force for good if they are planned well, but can bring adverse consequences if not.
"The development of new bioenergy industries could provide clean energy services to millions of people who currently lack them," it concludes, "while generating income and creating jobs in poorer areas of the world."
But the prices of food, land and agricultural commodities could be driven up, it warns, with major impacts in poorer countries where people spend a much greater share of their incomes on food than in developed nations.
Intensive farming of energy crops demands water and resources
On the environmental side, it notes that demand for biofuels has accelerated the clearing of primary forest for palm plantations, particularly in southeast Asia.
This destruction of ecosystems which remove carbon from the atmosphere can lead to a net increase in emissions.
The report warns too of the impacts on nature: "Use of large-scale mono-cropping could lead to significant biodiversity loss, soil erosion and nutrient leaching."
This has been avoided, the report says, in the Brazilian state of Sao Paulo where sugar cane farmers are obliged to leave a percentage of their land as natural reserves.
Water is also a concern. The expanding world population and the on-going switch towards consumption of meat and dairy produce as incomes rise are already putting pressure on freshwater supplies, which increased growing of biofuel crops could exacerbate.
In conclusion, UN Energy suggests policymakers should take a holistic look before embarking on drives to boost biofuel use.
"Only through a convergence of biodiversity, greenhouse gas emissions and water-use policies can bioenergy find its proper environmental context and agricultural scale," the report concludes.