Much talk in China these days of the possibilities offered by biofuels and ethanol – many in Beijing are touting biofuels as a cure-all, and the usual suspects who tremble and obey when the emperor speaks (The World Bank, McKinsey, all manner of two-bob consultants and snake oil salesmen, etc.) are all leaping upon the biofuels bandwagon. China currently ranks third behind Brazil and the US in ethanol production, while Beijing is understandably keen to reduce reliance on imported fuels. China has targeted an increase of E10 production (a blend of 10% ethanol and 90% unleaded petrol) to around 60m tons by 2010, and demand for ethanol is expected to rise by 20% over the next 5 years. Naturally, all sorts of companies want to get in on China's biofuels bounce, but is it really all positive news? A rash of conferences occurring across China, mostly (and predictably) focus on the business opportunities while ignoring questions of sustainability and applicability.

The environmental jury remains firmly out over whether any carbon is actually displaced through the use of biofuels – the large amounts of non-renewable fossil fuels required to produce, mill and transport corn in terms of the necessary factories and logistics may offset any gains. OK, you can run a car from waste vegetable oil discarded by restaurants, but if all the waste oil in the UK were used for fuel it would provide power for just one 380th of the UK's current vehicle fleet. Wood and straw can also be used, and appears more carbon neutral than using food crops, but would take years to scale-up to anything like making a dent in demand. Additionally, if you don't replace the straw you are simply removing biomass while wood will require expanded coppices encroaching onto existing wild or arable land, meaning either a) a loss of natural habitat at a time when China can't afford to lose much more, b) reduced arable land for crops at a time of rising food demand or c) both. Environmental scientists believe that, at a time of rapid urbanisation, rising food demand and the list of endangered animals and wild plants all increasing, devoting more land to growing fuel for cars is madness.

Also, let's consider that while so many are obsessed with China (the China Biofuels Dream anyone?) there will be knock-on effects for areas with less focus on them if biofuel use grows. China wishes to raise biofuel use, while the EU has set a target of 5% biofuels in its vehicle fleet by 2010. Arguably all well and good for Europeans, and perhaps the Chinese too, but what about South East Asia? Much of the necessary biofuel to hit EU and Chinese targets will have to come from palm oil – not grown in any real amounts in either China or the EU. It will have to come ostensibly from Malaysia and Indonesia. Demand will mean more clear-cutting of tropical forests which, as well as making the extinction of our rather nice close relation the Bornean orang utan far more likely, will cause additional carbon release from wood and peat burning – the infamous South East Asian ‘haze' of 1998 is already becoming an annual event with all the disastrous consequences in terms of health and environmental damage that follow. According to the Australian National University, while only 303,000 of the 2m hectares of land in Malaysia's East Kalimantan reserved for palm oil development have been planted, an estimated 3.1m hectares of rainforest has already been cleared under the guise of plantation development to meet rising demand. In Indonesia, Chinese investors now directly control about 600,000 hectares of palm oil plantations and growing.

Some estimates claim that biodiesel, based on palm oil feedstock, can be 10 times more carbon intensive than fossil feeds. Additionally, remember that this would accelerate Malaysia's one-crop agriculture as well as reducing Indonesia's agricultural spectrum, and that could also be bad news – Malaysians need few reminders of how becoming reliant on one crop can be disastrous – it happened before when the British virtually converted the entire country to one big rubber plantation (and then introduced palm oil around 1917 as global rubber prices fell). The China effect once again.

There is of course another way to save fuel – don't use so much. Interesting then that China has announced that 100 cities are to take part in a car-free day on September 22nd as part of World Car Free Day – not sponsored by GM surprisingly. Apparently cars will be banned entirely from some urban areas and officials will have to trade their black sedans for public transport, or dust off their old bikes (most we expect will probably just take the day off rather than sweat with the masses). However, it's interesting that some officials are now openly saying that China's growth in car use cannot be sustained in terms of either energy resources, pollution control or existing infrastructure.

This week's carbon emissions-free Access Asia Weekly Update includes a new report on Kids in China as well as Fat China in Shanghai, a rather dismal Shanghai Live Earth, why China is to blame if your garden looks lame, museum quotas, we wonder why seven “wonders”, Carl Crow redux in 2007 as history repeats itself on China's newsstands and the worrying trend of the British Council towards self-censorship in China on New Labour orders.