THERE are few people who would deny that, generally speaking, Britain's transport industry is not particularly environmentally sound.

Fossil fuels, which are used to make petrol and diesel, are one of the main carbon emitters responsible for global warming.

In a bid to move away from fossil fuels, the British government has, under an EU directive, introduced plans to replace five per cent of vehicle fuel with biofuel by the year 2010.

This amount will rise to 20 per cent by 2020.

Mass-produced biofuel is made from a number of crops, including sugar cane, soya oil, palm oil, wheat and corn.

In theory, fuels made from plants reduce the amount of carbon dioxide emitted by vehicles as plants absorb carbon while growing, which is then released again when the fuel is burnt.

The government has embraced biofuels as a way to tackle climate change, and Gordon Brown included the issue in his budget.

But while the idea of cutting down on the use of fossil fuels may seem attractive, the idea has many critics.

The main arguments against the adoption of biofuels centres around three main points.

The first is that the creation of biofuel from any of the sources mentioned above is highly energy intensive.

Therefore, the actual production of the fuel would create more carbon emissions than the use of it would save.

Secondly, huge swathes of virgin rainforest are being chopped down to make way for farmland in order to grow biofuel crops.

The conversion of rainforests into palm oil plantations is a huge threat to many species of plants and animals, including the orang-utan which could become extinct due to deforestation.

There is also concern that farmers will choose to grow crops for fuel rather than for food, leading to increased famine.

Environmental analyst Lester Brown said: "Put simply, the world is set for a head-on collision between the world's 800 million affluent automobile owners and food consumers."

And criticism for the idea comes from all quarters. The Bolton Alternative Fuel Co-Operative use waste oil from local restaurants and businesses and convert it into a form of biodiesel.

They are horrified at the thought that they might be lumped in with the huge international biofuel companies.

Brian Rylance, from the co-operative, said: "We are fuelling vehicles from waste."

Brian started using fuel from waste oil after hearing a speaker at a Greenhouse Project event. He began to buy the fuel but, as supplies got short, decided it would be easier to make it himself.

The co-operative works with Bolton Council to collect waste oil, and one of the council's vehicles runs on the fuel, bringing the idea full circle.

Brian says: "You know food miles? If you can imagine fuel miles' and how many litres of fuel get burnt just transporting and delivering fuel from far-off countries to here, well what we do is all happening within 20 miles.

"We're really concerned about the shift to large-scale industry using palm oil and the effects on biodiversity and the rainforest that will have. If you like, it's taking something good and turning it into something bad.

"We tend to get branded as part of the biofuels', but we see ourselves as very much separate from large-scale industrial processors. We collect locally and provide locally. It closes the circle, whereas we look in abject horror at the plant in Tyneside - it's a multi-million pound thing with its own quay so it can unload from far afield. It negates the whole point. I have a horrible joke about how every litre from there comes with its own personalised name of an extinct orang-utan."

The co-operative also runs a short course with Bolton University which looks at the practical, regulatory and legal aspects of producing biofuels from waste oil.

Large scale biofuel production is generally seen as a political move rather than an environmental one. After all, the production of biofuel from palm oil is actually less environmentally sound than the production of petrol.

A report by the Dutch consultancy Delft Hydraulics shows that every ton of palm oil results in 33 tonnes of carbon dioxide emissions, or 10 times as much as petroleum produces.

Journalist George Monbiot said in the Guardian: "The reason governments are so enthusiastic about biofuels is that they don't upset drivers. They appear to reduce the amount of carbon from our cars, without requiring new taxes.

"It's an illusion sustained by the fact that only the emissions produced at home count towards our national total. The forest clearance in Malaysia doesn't increase our official impact by a gram."

Yet this is a problem which the government is aware of. Monbiot states in his article that last year the environment secretary David Miliband wrote on his blog that palm oil plantations "are destroying 0.7 per cent of the Malaysian rainforest each year, reducing a vital natural resource (and in the process, destroying the natural habitat of the orang-utan)."

Monbiot believes that a five-year freeze on biofuels is necessary. But he is not hopeful. "Stopping them requires one hell of a battle, but it has to be fought," he says.