The law increasing the biofuel content of petrol and diesel to a minimum of 2.5% has come under fire in the week it came into force.
The Government heralded the move as a way to allow motorists “to fill their tanks with greener fuels”.
However, critics said it will do more harm than good.
Environmental campaign group Greenpeace said the new rules will “drive rainforest destruction and could actually accelerate global warming”.
Senior forests campaigner Belinda Fletcher explained: “Right now, rainforests are being destroyed to make way for biofuel crops in places like Indonesia.
“This destruction leads to massive greenhouse gas emissions and completely undermines the point of these so-called green fuels.”
The RSPB, Friends of the Earth and Oxfam have also voiced their concerns about the new law. Oxfam described it as “reckless”.
Despite the growing evidence against biofuel use, the Government pushed ahead and introduced the law as part of its Renewable Transport Fuel Obligation.
This obligation should see all UK road fuels contain 5% of biofuel by 2010, bringing the UK in line with European legislation.
However, motorists can still avoid putting biofuel into their vehicles.
In a move that was supposed to protect against fluctuations in biofuel prices, the Government has given suppliers the option to pay a ‘buy-out’ price in respect of some or all of their biofuel obligation.
In defence of the new law, which the Government says will save 2.5 million tonnes of CO2 by 2010, a Department for Transport spokesman said: “The UK has gone further than any other country to give fuel suppliers a real incentive to produce sustainable biofuels that do not harm the environment.
“Suppliers are required to produce sustainability reports, including information on where their biofuel crops come from and the level of carbon savings made.”
But Greenpeace pointed out that the reporting process is not robust enough.
“Suppliers are only required to ‘report’ the details of the crops they are using.
“This process can be easily manipulated to hide the true origin of environmentally damaging crops like palm oil,” said a spokesman.
Government ministers, including transport minister Jim Fitzpatrick, rallied to support the law amid the growing criticism.
He said: “We must do all we can to ensure biofuels are produced sustainably.
“We know people are concerned about the environmental risks associated with expanding biofuel production and we take those concerns very seriously.”