But if forests and other green spaces are cleared to make way for biofuel production, an immediate release of carbon into the atmosphere takes place, researchers working on the University of Leeds-backed study state.
"Biofuel policy is rushing ahead without understanding the implications," Dr Renton Righelato, member of conservation charity the World Land Trust and joint author of the report, is quoted by the Guardian as saying.
"It is a mistake in climate change terms to use biofuels."
Britain is committed to replacing ten per cent of its transport fuel with biofuels by 2020.
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