Plans to increase biofuel contribution to 10% of EU transport fuel by 2020 have been criticised by environmental NGOs, who increasingly believe that the promotion of biofuels may actually cause more harm than good.

Biofuels have been championed as a "carbon neutral" source of energy, since in theory their use does not emit more carbon dioxide than the amount absorbed during the growth of the plant. Moreover, biofuels may lead to a reduction in air pollution or a reduction of waste. 

The Commission argues that they these renewable fuels will create jobs and provide new sources of income for agriculture. They will also help to meet the Kyoto targets and to diversify Europe’s energy mix.

However, some NGOs argue that the production of biofuels may ultimately be detrimental, for a number of reasons:

  • Land upon which many poorer countries in the South depend on for food may be replaced with biofuel plantations with Europeans' reliance on an "automobile culture" leading to natural ecosystems such as the Amazon rainforest in Brazil being replaced with soybean plantations;
  • it has been argued that it actually takes more energy to produce biofuels than is contained in the biofuels themselves;
  • building the infrastructure to service plantations will produce further environmental damage;
  • some chemicals used on the plantations are also criticised for their negative effects on human health;
  • finally, the use of genetically modified crops in the production of biofuels is highly controversial.

To solve some of these problems, the Commission plans to promote the development of so-called second generation biofuels which are produced from ligno-cellulosic or 'woody' sources such as straw, timber, woodchips or manure. 

It has argued that these are more favourable than the current "first generation" biofuels mainly produced from crops such as sugar beet and rapeseed due to their expected lower costs, more favourable GHG balance, energy output and better fuel quality. 

In addition, their ability to use a wider range of biomass feedstocks means that they compete less with food production (see Commission public consultation on biofuels). However, such second generation technology is still only at the development stage.