According to a new study researchers have found that biofuels can hasten climate change.
Researchers point out that it will take more than 75 years for the carbon emissions saved through the use of biofuels to compensate for the carbon lost when biofuel plantations are established on forestlands.
If the original habitat was peatland, carbon balance would take more than 600 years.
The oil palm, increasingly used as a source for biofuel, has replaced soybean as the world's most traded oilseed crop. Global production of palm oil has increased exponentially over the past 40 years.
In 2006, 85 percent of the global palm-oil crop was produced in Indonesia and Malaysia, countries whose combined annual tropical forest loss is around 20,000 square kilometers.
Conversion of forest to oil palm also results in significant impoverishment of both plant and animal communities.
Other tropical crops suitable for biofuel use, like soybean, sugar cane and jatropha, are all likely to have similar impacts on climate and biodiversity.
"Biofuels are a bad deal for forests, wildlife and the climate if they replace tropical rain forests," said research scientist Finn Danielsen, lead author of the study.
"In fact, they hasten climate change by removing one of the world's most efficient carbon storage tools, intact tropical rain forests," he added.
As countries strive to meet obligations to reduce carbon emissions under one international agreement (Kyoto Protocol), they may not only fail to meet their obligations under another (Convention on Biological Diversity) but may actually hasten global climate change.
According to the study, reducing deforestation is likely to represent a more effective climate-change mitigation strategy than converting forest for biofuel production, and it may help nations meet their international commitments to reduce biodiversity loss.
Alternatively, planting biofuels on degraded grasslands instead of tropical rain forests would lead to a net removal of carbon from the atmosphere in 10 years.
Any biofuel plantations in tropical forest regions should be considered only in former forest land which has already been severely degraded to support only grassy vegetation.
"The EU and the US should only import and subsidize bio-fuel from guaranteed sustainable productions and only from countries which can demonstrate that their forests are sustainably managed," said Danielsen.