Biofuels Are A Climate Policy Disaster, New Data Reveal

Biodiesel and other “biofuels” have been sold for years as a climate solution, but new analysis focused on Malaysia and Indonesia finds that meeting biofuel demand often means cutting down carbon-rich forests—producing far more emissions than climate models assumed. The result is a sharp reversal of the policy promise: rather than reducing greenhouse gases, vegetable-oil biofuels may be increasing global emissions, with emissions exceeding 1 gigaton of CO2 in the authors’ estimate.

The core logic behind biofuels is straightforward. Plants absorb CO2 as they grow, and burning biofuel releases that CO2 back into the atmosphere, creating a “net zero” cycle in principle. That reasoning helped drive decades of government subsidies, mandates, and “low carbon” accounting, allowing biofuel industries to expand. The International Energy Agency reports biofuels now supply more than 4% of global transport energy, with growth projected—small in percentage terms, but large in absolute market size.

Much of the confidence came from economic and climate modeling used in policy settings, including frameworks relied on by the US Environmental Protection Agency. Those models typically assume that rising biofuel demand is met through a mix of farmers switching to biofuel-capable crops, boosting yields of existing biofuel crops, or expanding production by displacing other land uses. The new analysis challenges that picture by examining land conversion patterns tied to biofuel plantations, especially palm oil in Malaysia and Indonesia.

When demand is met through land expansion, the study finds the shift disproportionately comes from deforestation—forests that store substantial carbon both in vegetation and in soils. The authors estimate that the resulting emissions exceed 1 gigaton of CO2, and they conclude that biofuels derived from vegetable oils likely increased rather than reduced global emissions. They also translate the findings into “carbon intensity” per unit of fuel, reporting that vegetable-oil-based diesel has a higher carbon intensity than fossil diesel even before accounting for additional emissions from fertilizers, processing, and transport.

The concern isn’t entirely new. Oxfam’s 2024 briefing argued that land-use emissions make vegetable-oil biofuels a climate disaster, and journalist Michael Grunwald previously described corn ethanol as similarly harmful when land-use change is included. Still, there’s a caution flag: the new work is a working paper by three agricultural economists at UC Davis and has not yet undergone peer review.

Crop choice also matters. The climate footprint varies widely by feedstock: palm oil and soy are described as among the worst performers, corn and grape seed sit in the middle, and sugar cane is among the best for ethanol. That nuance matters because it prevents a blanket conclusion that all biofuels are inherently bad. Even so, the transcript’s bottom line is that making biofuels genuinely climate friendly is difficult—especially because emissions occur across the production chain (fertilizer, farming, transport), and land-use change can dominate the accounting.

In short, biofuels were meant to save the climate; the new evidence suggests they may mainly have delayed disappointment—at least for vegetable-oil pathways—by substituting one set of emissions for another, often on forest land.