Governments should fit biofuels into an overall energy, climate, land-use, water and agricultural strategy if their deployment is to benefit society, the economy and the environment as a whole.
The report, the first by the United Nations Environment Programme's (UNEP) International Panel for Sustainable Resource Management, says some first generation biofuels such as ethanol from sugar cane can have positive impacts in terms of greenhouse gas emissions.
As currently practiced in a country such as Brazil, it can lead to emissions reductions of between 70 percent and well over 100 percent when substituted for petrol.
However, the way in which biofuels are produced matters in determining whether they are leading to more or less greenhouse gas emissions. Conditions under which production of biofuels does lead to higher emissions have been identified in the report.
The production and use of biodiesel from palm oil on deforested peatlands in the tropics is cited. It can lead to significant increases in greenhouse gas emissions-up to 2,000 percent or more when compared with fossil fuels.
This is mainly as a result of carbon releases from the soils and land. However, a positive contribution to greenhouse gas emissions can arise if the palm oil or soya beans are instead grown on abandoned or degraded land.
The report Towards Sustainable Production and Use of Resources: Assessing Biofuels is based on a detailed review of published research up to mid-2009 as well as the input of independent experts world-wide.
It has been written to assist governments and industry in making sustainable choices in an area that over the past few years has become deeply divided while triggering sharply polarized views.
Achim Steiner, UN Under-Secretary General and Executive Director of the UN Environment Programme, which hosts the Resource Panel, said : 'Biofuels are neither a panacea nor a pariah but like all technologies they represent both opportunities and challenges.'
'Therefore a more sophisticated debate is urgently needed which is what this first report by the Panel is intended to provide. On one level, it is a debate about which energy crops to grow and where and also about the way different countries and biofuel companies promote and manage the production and conversion of plant materials for energy purposes-some clearly are climate friendly while others are highly questionable,' added Mr. Steiner.