The EU target of ensuring 10% of petrol and diesel comes from renewable sources by 2020 is not an effective way to curb carbon emissions, researchers say.
The researchers question whether biofuel can cut carbon emissions
A team of UK-based scientists suggested that reforestation and habitat protection was a better option.
Writing in Science, they said forests could absorb up to nine times more CO2 than the production of biofuels could achieve on the same area of land.
The growth of biofuels was also leading to more deforestation, they added.
"The prime reason for the renewables obligation was to mitigate carbon dioxide (CO2) emissions," said Renton Righelato, one of the study's co-authors.
"In our view this is a mistaken policy because it is less effective than reforesting," he told BBC News.
Dr Righelato, chairman of the World Land Trust, added that the policy could actually lead to more deforestation as nations turned to countries outside of the EU to meet the growing demand for biofuels.
The scientific principle behind biomass is the carbon cycle
As they grow plants absorb carbon dioxide (C02)
The carbon (C) builds tissues and feeds the plant while the oxygen (02) is released
When plant material is burned the carbon re-combines with oxygen
The resulting carbon dioxide is released back into the atmosphere
The contribution of biomass to the greenhouse effect is therefore far less than for traditional fossil fuels
The study compared the amount of carbon absorbed by a forested area with the total of "avoid emissions" by using biofuels instead of fossil fuels.
The researchers examined arable land that could either be used for growing crops to produce biofuels, or replanted with trees.
"We looked at the amount of biofuels produced per hectare," Dr Righelato explained. "From that figure, we were able to calculate the amount of fossil fuels that could be replaced by biofuels.
"That gave a figure for avoided emissions, but then we had to subtract from that the carbon emissions generated during the production of the biofuels.
He said this calculation provided them with the "net avoided carbon emissions".
"This is the key factor, that is the amount of CO2 that is saved from being released into the atmosphere by using the biofuel."
The researchers then compared the net avoided carbon emissions with the amount of CO2 that would have been absorbed if forests were re-established on the land.
"In all cases, the amount of CO2 sequestered (by forests) over a 30-year period is considerably greater than the amount of emissions avoided by using biofuels," Dr Righelato revealed.
The researchers also examined the impact of clearing forests in order to convert land to grow crops used to make biofuels.
Dr Righelato said forest clearances had a large and immediate impact on the carbon cycle.
"Forest carbon stocks are in the region of 100-300 tonnes per hectare. Three-quarters of that is lost over the first year during clearing and burning," he said.
"It would take - in all the cases we examined - between 50 to 100 years to recover this carbon through the production of biofuels."
However, he said that so-called second generation biofuels, which used feedstocks such as straw, grasses and wood (lignocellulosic material) rather than grains or palm oil, offered a much better opportunity.
"It was the one route that seemed to offer some possibilities in terms of CO2 mitigation.
"If you can extract lignocellulosic materials sustainably from forests without destroying the soil and maintain a way that forests can rapidly regrow, it is quite possible you can have your cake and eat it, as it were."
A number of nations, including Germany, the UK and US, are developing second generation biofuels, but the capital costs needed to build commercial "biorefineries" have been seen as a major barrier.
But two US researchers, writing in the Biofuels, Bioproducts and Biorefining journal, say that rising grain prices could make the technology commercially competitive sooner rather than later.
Mark Wright and Robert Brown, from Iowa State University, US, said that a second generation biorefinery cost four to five times as much as a bio-ethanol plant that used grains, such as corn.
However, the overall cost of producing second generation biofuels would be similar to biofuels produced from food crops when corn prices exceed $3 (£1.50) per bushel, they explained.
The adoption of second generation biofuels would be welcomed by environmental groups and food agencies, who view first generation fuels as unsustainable.
Experts at the World Water Week conference in Stockholm have voiced concern that growing food crops to be used to make biofuels could jeopardise water supplies.
"When governments and companies are discussing biofuel solutions, I think water issues are not addressed enough," Johan Kuylenstierna, director of the annual conference, told AFP.