Here's an article that brings up a couple of serious drawbacks to biofuels.
As the government subsidy induced demand for ethanol increases the demand for corn in the U.S., and other types of crops the world over, increasing pressure will build to convert more land to agricultural uses. This threatens biodiversity and several endangered species and increases the amount of poor land in agricultural production.
As more land is devoted to growing crops for biofuels, the cost of food will go up. This has already happened with the Mexican tortilla situation earlier in the year and food prices going up 10 and 6 percent in Indian and China respectively in the last year. This threatens to increase hunger and malnutrition around the globe.
The last paragraph of the article is worth quoting in full:
"As long as global warming is hyped as the world's most important environmental problem - as many politicians and environmental pressure groups claim - it will be virtually impossible to rationally evaluate other options in dealing with climate change, or confront the unintended consequences unleashed by global warming hysteria."