Only a third of biofuels in UK vehicle tanks meet environmental standards, falling well short of the 50 per cent target set by the government, according to a report on the fuels.
The Renewable Fuels Agency report said companies had exceeded targets to source 3.25 per cent of UK road transport fuels from biofuels in the past year, with 3.33 per cent of petrol and diesel coming from renewable sources.
The volume of biofuels supplied for road transport in 2009/2010 reached almost 1.6 billion litres, the provisional figures showed.
But only 33 per cent met a sufficient number of environmental and sustainability standards such as ensuring that growing the fuels did not destroy wildlife-rich areas, cause air pollution or damage carbon stores, soils and water resources.
The official goal for the second year of the scheme to introduce renewable fuels into the UK transport fuel supply was for half of the biofuels in vehicle tanks to meet the environmental standards.
The majority of fuels were sourced from outside the UK, with just 10 per cent of the plant crops that were used to make the fuels grown in this country.
But 98 per cent of the crops sourced from the UK were judged as meeting the environmental and sustainability targets.
The fuels, which are made from plant sources such as soy from Argentina and sugar cane from Brazil, delivered carbon savings of 51 per cent compared to petrol and diesel from fossil fuels.
The figure exceeds the 45 per cent target set by the government, but does not necessarily paint the full picture of emissions from biofuels, which have been implicated in causing deforestation and releasing extra carbon dioxide as land is cleared to grow the fuel crops.
Companies are required to report on the previous use of the land used to grow the biofuels, but for 29 per cent of the renewable fuels the previous land use is listed as "unknown". The carbon figures also do not take into account the impact of "indirect land use change", for example switching land from growing food to growing biofuels, raising demand for land elsewhere to grow the food - which could in turn lead to forest clearance.
The figures, which include a breakdown of how individual companies were doing on delivering carbon savings, showed that some of the big names were failing to meet the government's target - including Chevron, Murco, Total, Conoco Phillips and BP.
Most, including Shell and Esso, failed to meet the environmental standards, with Mabanaft, Greenergy, Topaz and Lissan the only companies to outstrip the 50 per cent target. Nick Goodall, chief executive officer of the Renewable Fuels Agency, said: "The volume target has been met, which is welcome news.
"But this is about sustainable carbon reduction.
"The leading suppliers have demonstrated that it is possible to secure sustainable biofuels in volume. Others have fallen well short."
Friend of the Earth biofuels campaigner Kenneth Richter said: "It's little surprise that UK biofuels are failing to meet green standards - we have been warning about this for years.
"In fact, efforts to increase the use of biofuels are doing more harm than good, with research indicating that using fuel crops is likely to increase overall climate emissions from transport, rather than reducing it."