British policies on bioenergy from plants and other natural materials lack ambition and clarity, MPs have said.
The Commons Environment, Food and Rural Affairs Committee (Efracom) says the UK is lagging behind other countries.
It urges the government to look beyond its existing 5% target for biofuels in road transport, and promote bioenergy for heating homes and aviation.
However, it says that wide adoption of currently available biofuels could have serious consequences for wildlife.
The government's target, announced last year in response to a European directive, is to have 5% of road transport fuelled by bioethanol and biodiesel by 2010.
Last year, Efracom says, the figure was 0.25%; in 2003, France and Germany combined produced 100 times more biofuel than Britain.
"The government has got to show a much greater commitment, coherence and enthusiasm in the way it develops its bioenergy policies," said Efracom chairman, Michael Jack MP.
"For a nation that prides itself on its international leadership role on the climate change agenda, it's not acceptable for Britain to lag behind so many other countries in the way that it is embracing bioenergy."
Biofuels made from crops such as wheat and rape are currently the most viable alternative to conventional petrol and diesel for road transport.
Like other bioenergy crops, their adoption would reduce greenhouse gas emissions. They release carbon dioxide to the atmosphere when they burn, but absorb it as they grow.
But land for growing them could quickly become scarce, Efracom concludes. Moving beyond the existing 5% target for road transport would, it says, have "serious land use implications".
Brazilian cars have been running on bioethanol for years
The diversity of plants and animals would also be threatened.
The committee suggests that if the goal is to reduce greenhouse gas emissions, biofuels for transport may not be the best option.
Using the same land to grow plants which would be burned to produce heat or electricity or both could yield better returns, it feels.
Last year, a government-commissioned Biomass Task Force said biomass could provide 7% of Britain's heat by 2015. But the energy review published in July refrained from setting targets for its take-up.
The report is optimistic too about "second generation" technologies which could take organic waste such as wood chips, chicken litter, or straw and either burn them or convert them into other fuels.
THE UK'S NON-FOOD CROPS
Biofuels - oilseed rape, wheat, barley, sugar beet
Energy crops - willow, miscanthus
Biopolymers - linseed, high erucic acid rape, cereals
Biolubricants - crambe,
Pharmaceuticals - borage, crambe, poppy, echium, chamomile
Construction - hemp
It notes with particular interest that kerosene could be produced this way for use in aviation, currently the fastest-growing source of greenhouse gas emissions.
Efracom concludes the government is not doing enough in these areas.
"Policy... amounts to disjointed piecemeal incentives, allowances and grant schemes," it says.
"The lack of ambition... by the government calls into question its whole commitment to the domestic climate change agenda."
One possible use of biomass fuel is in power plants using a process such as the one shown above, the Combined Cycle
The fuel is turned into hot pressurised combustion gases, which are cleaned to prevent corrosion of the system
The clean gases are then burned with air before entering a turbine, generating electricity
Heat from the gases is recovered after the gas turbine using water in the heat exchanger
The combustion gases can then usually be vented from a stack without further cleaning
The only other by-product is non-toxic ash, which could, for example, be mixed with compost to help grow more biomass fuel