However, the person in charge of energy policy at the UN Food and Agriculture Organisation (FAO) said biofuel was getting a bad press and, rather than being a threat to the poor, it could boost food production as well as wealth.

"It's probably the best opportunity there has been since the 'green revolution' to bring really a new wind of development in rural areas," Gustavo Best told Reuters in an interview.

He was referring to the huge increase in food production in the developing world, aided in part by new plant technologies that came into vogue in the 1960s.

"If done well," he added. "If well managed, bio-energy production can bring new areas of development ... new investment, new jobs and new infrastructure that can also benefit the food industry," Best said on Monday.

That is a significant "if". The FAO has highlighted the risk of increasing biofuel production for the world's 854 million hungry people.

"Liquid biofuel production could threaten the availability of adequate food supplies by diverting land and other resources away from food crops," it said in a study issued last month.

Environmentalists have criticised Malaysia and Indonesia for chopping down forests to make way for palm oil plantations, and in Africa only intense lobbying prevented the Ugandan government from doing the same on an island in Lake Victoria.

CARBON NEUTRAL

Biofuels have come into vogue this decade largely because of increasing evidence that carbon dioxide (CO2) emissions from fossil fuels like oil, gas and coal are causing global warming.

Because plants like sugar cane, palm fruit, maize and rapeseed all absorb CO2 as they grow, their impact on the climate is considered far lower than that of traditional fuels.

Experts say if crude oil is trading at above US$40 a barrel, biofuel can be a viable alternative. The last time crude was below US$40 was January 2005.

Demand for biofuels could mean big opportunities for many tropical areas, including large parts of Africa, to grow crops like sugar cane and sorghum to make ethanol, Best said.

The International Energy Agency says biofuels now account for 1 percent of road-fuel consumption. It can also be used in power plants to generate electricity.

The FAO does not have definitive figures but Best estimated that, in all its uses, it accounted for 8-10 percent of global energy production, up from less than 5 percent 10 years ago.

Biofuels have a maximum potential of 20-30 percent of global energy production, he said, due to competing demand for land and water and continuing competition from fossil fuels and other sources.

"One figure one has to remember is that biofuels will never substitute 100 percent for gasoline or diesel," Best said. "It's not the magical solution to substitute oil, no way."

The European Union already requires a minimum of 2 percent of biofuels be blended with petrol and diesle, rising to 5.75 percent at the end of 2010, as part of its drive to meet greenhouse gas reduction targets under the Kyoto Protocol.

In the United States, which has not ratified Kyoto, concerns about the environment and energy security have boosted demand for ethanol from maize, something which has already had a knock-on effect on the food market, Best said.

"It has at least partially influenced corn prices in countries like Mexico and others. There are some indications that within the US market itself this could impact prices of maize for feed for animals and therefore raise the price of meat and milk."

Best said there was no evidence yet that biofuel production had reduced food availability in poor countries, but admitted it was a potential risk.