Almost all biofuels result in more carbon emissions than the fossil fuels they are intended to replace, according to the latest study to raise grave concerns over the environmental impact of booming demand for fuels made from plants.

The research from the University of Minnesota and the Nature Conservancy, which was published in the journal Science yesterday, assessed the full carbon impact from biofuels, including emissions associated with the clearance of land to make way for fuel crops. It found that where land is converted to fuel plantations the biofuels release between 17 and 420 times more carbon than the annual savings from replacing fossil fuels.

Concerns over the carbon impact of rainforest clearance in Indonesia prompted by booming demand for biofuels are already well established, but the report argues that converting savannas and grasslands leads to a similar net increase in carbon emissions.

EU legislators recently sought to appease critics of its target for 10 per cent of transport fuels to come from biofuels by 2020, pledging to develop a certification scheme to ensure only biofuels that meet strict sustainability standards are imported into the EU.

But the report raises serious questions about the feasibility of such proposals. Joe Fargione, a scientist for The Nature Conservancy and co-author of the report, insisted that the impact on crop prices of biofuel demand meant that "all the biofuels we use now cause habitat destruction, either directly or indirectly".

For example, as prices for palm oil climb as a result of biofuel demand more farmers switch their crops to biofuel to tap into the opportunity for increased profits. Such palm oil from established plantations would meet sustainability criteria, but the knock on impact is that fresh land has to be cleared to make way for the food crops that the farmers are no longer growing.

Similarly, the researchers argue that increased demand for ethanol corn crops in the US has prompted many farmers to stop growing soybeans. Brazilian farmers have moved to meet the demand for soybeans no longer being met by US farmers, but there is growing evidence they are clearing savannas and rainforests to do so.

Report co-author and University of Minnesota applied economics professor Stephen Polasky argued that a major overhaul of biofuel incentives was required to tackle the problem. "We do not have proper incentives in place because landowners are rewarded for producing palm oil and other products but not rewarded for carbon management," he said. "This creates incentives for excessive land clearing and can result in large increases in carbon emissions… Creating some sort of incentive for carbon sequestration, or penalty for carbon emissions, from land use is vital."

The report noted that some forms of cellulosic biofuels that use waste agricultural material or native grasses do not lead to increased carbon emissions as they have no impact on natural habitats. "Biofuels made on perennial crops grown on degraded land that is no longer useful for growing food crops may actually help us fight global warming," said Hill. "One example is ethanol made from diverse mixtures of native prairie plants."

A raft of biofuel firms are currently racing to develop a commercially viable technique for refining such cellulosic biofuels, but currently such fuels make up a fraction of global supply and some experts warn it could take years to make second generation biofuels cost competitive.

Yet despite the latest wave of warnings about biofuels' environmental impact there are few signs that demand is abating.

According to Associated Press reports this week, General Motors has said it is planning for half of its cars in the US to be running on bioethanol by 2012. GM North America president Troy Clarke told the newswire the company will have 11 ethanol-capable vehicles on the market this year and 15 in 2009.