30/8/06 ( AutoSpies.com)  - Biofuels can both bring down high pump prices and help halt climate change, their supporters hope.

But the result of the global boom in the green fuel additive may just have precisely the opposite effects in the near-term, according to both oil company executives and green campaigners.

The higher cost of the new fuel will end up being passed down to drivers by the oil industry, and the rush to plant more biofuel crops could result in burning swathes of virgin forest cleared for cultivation, speeding up global warming.

Heightened political worries about climate change, energy security and soaring oil prices have triggered a race to produce the alternative fuel, made from sugars, cereals and vegetable oils, as rules are enforced stipulating the minimum amounts that must be blended with fossil fuels.

In the United States 46 ethanol plants are in the pipeline, 100-plus Brazilian ethanol sugar mills are expected by 2011, the EU sees cereals use for biofuels quadrupling by 2013, and Indonesia and Malaysia are to set aside two-fifths of their palm oil output for biodiesel.

But compared to conventional gasoline, biofuels are still uneconomic in developed countries and hefty tariffs and transport costs weigh on imports.

And as capacity explodes the expected forest clearance could release a surge of carbon dioxide into the atmosphere, environmental campaigners say.