This report published by the OECD (Organisation for Economic Cooperation and Development) emphasises many of the downsides of biofuels. These include:

• Land use conflicts between growing crops for fuel and crops for food
• Environmental damage particularly in tropical areas (where biofuels can most readily be grown)
• Poor CO₂ and other credentials for many biofuels when compared with fossil fuels
• Little potential for reducing oil dependence and improving national fuel security.
• Lack of cost effectiveness

The report says that even in the ’best-case scenario’, biofuels will only be able to achieve a 3% reduction in energy-related CO₂ emissions by 2050, thus failing to reduce petroleum fuel consumption. It also points out that higher oil prices will have the effect of increasing biofuel production costs while simultaneously making fossil fuel alternatives such as tar sands and coal-to-liquids increasingly competitive. The report arges that second-generation technologies hold promise but depend on technological breakthroughs. It recommends that priority should be given to research into second-generation biofuels - not only their technologies, but also the assumptions regarding the cost and long-term availability of feedstocks. Domestic policy efforts should be redirected from (subsidy) instruments aimed at the deployment of biofuels in general back to the R&D and demonstration phase of advanced biofuel technologies.