Biofuels should make up the majority of the UK's target for 10 per cent of all road transport energy to come from renewable sources by 2020, according to new research.
A report carried out by the Renewable Energy Association (REA) and peer-reviewed by Imperial College London says the domestic arable sector would be able to meet bioethanol demands.
However, it admits that virtually all biodiesal would need to be imported.
The report says technologies like electric cars and biogas would not be ready to make a major contribution by 2020.
REA said 'negativity' around biofuels in the UK had put off investors and that the infrastructure was still lacking in the UK. It said with the right commitments from the Government, bioethanol production in the UK had the potential to rise by 20 times its current level by 2020.
But Friends of the Earth expressed concern at the admission that nearly all biodiesal would need to be imported.
It said that the clearing of land to grow the biofuel crops needed to meet this demand, such as soy and oil palm, was having a, 'devastating impact on the world's forests'.
Last week, a report from the United Nations Environment Programme (UNEP) said palm oil biodiesel grown on land from cleared tropical forests could lead to greenhouse gas emission rises of 800 per cent or more.
'Increased biofuel production is expected to have large impacts on biological diversity in the coming decades, mostly as a result of habitat loss, increased invasive species and nutrient pollution.
'Clearing the natural vegetation mobilises the stocked carbon and may lead to a carbon debt, which could render the overall GHG mitigation effect of biofuels questionable for the following decades there is a potential risk for competition between food and fuel, and consequences on food prices as a result,' said the UNEP report.
A further study, 'Indirect emissions from biofuels: how important?' published in Science Express today found the switch from food to fuel crops was likely to lead to increased and not less carbon emissions.
It said land required to grow biofuel crops would displace food crops, and drive deforestation to create more farmland, itself a powerful source of carbon emissions.
Furthermore, it said, biofuel crops would require nitrogen fertilisers, a source of two greenhouse gases: carbon dioxide (CO2) and the more powerful nitrous oxide.