NOT long ago biofuels seemed the obvious answer to demands for greener motoring. Using fuel made from crops that absorbed CO2 as they grew sounded a neat way to reduce emissions from fossil fuels. Almost all cars could run on it (at least when mixed with conventional fuel) and it could be delivered via existing pumps and pipelines.

So industrial investment and political reputations were staked on biofuels. Between 2000 and 2005, worldwide production of ethanol, the most popular first-generation biofuel, doubled; production of biodiesel quadrupled. Car-makers rushed in flex-fuel models (in Brazil, where ethanol has been made from sugar cane since the 1970s, they have 70 per cent of the market), and refiners rushed supplies to motorists.

President Bush – with an eye on cutting dependence on Middle East oil – set a target for the US to produce 35 billion gallons of alternative fuel a year by 2017. The EU said 10 per cent of all transport should run on biofuel by 2020. The Government said 5 per cent of fuel sold in UK garages should be from renewable sources by 2010.

But the hazards of going down this road soon became apparent. In Mexico there were riots as demand for corn to fuel American cars pushed the price out of reach of those who needed it for food. Environmental groups around the world protested as agricultural corporations cleared thousands of acres of rainforest to grow oil palms or sugar cane for biofuel, producing huge carbon emissions as they burned off the vegetation.

A UN report said the rush for biofuel could damage the economy and biodiversity in many developing countries. The Royal Society questioned the carbon savings of biofuels and called for targets to be firmly linked to cuts in greenhouse gas emissions.

Stavros Dimas, the EU’s Environment Commissioner, admitted that the adverse effects on poor communities and the environment had been underestimated. This week a committee of MPs said that the rush for biofuels was doing more harm than good to the environment and called upon the Government to scrap its target.

The motorist with a conscience could be forgiven for being confused. Are these just potholes along the road to a healthier future or is it in danger of coming to a dead end? Dr Martin Tangney, director of the Biofuel Research Centre at Napier University, Edinburgh, believes that a second generation of biofuels is on the way that will answer most of the criticisms.

“Some of these objections to first-generation biofuels are serious, but there is still a lot of research to do and it should not be tainted. It is important that people understand the objectives, which are for us to have renewable sources of fuel that do not compete with food supplies, do not threaten biodiversity and do not contribute further to global warming,” he says.

The centre opened last month and is designed to bring together industry, government, academia and the public to further research and understanding of second-generation biofuels. The most promising line of development now focuses on butanol, a fuel that potentially can be produced by fermentation from a diversity of organic material, including waste products from industrial processes, thus ensuring that the raw materials and harvesting involve no extra emissions.

The molasses left behind by sugar production is one of the most suitable bases; whey from cheese production is another possibility. Butanol has several advantages over ethanol: it has a higher energy output, is easily blended with diesel and, because it is less subject to evaporation, is easier to transport.

Tangney adds: “We are putting together an EU consortium to identify dominant waste products across different regions and assess how many could be used to produce fuel.” He believes that directives such as the Government’s Renewable Transport Fuels Obligation that set the 5 per cent by 2010 target have played an important part in driving research. “I would be optimistic that this target could be met,” he says.