Biofuels are already entering the market, driven amongst other things by their potential to improve energy security and to contribute to climate change mitigation. While in certain conditions the best use of the plant material - biomass - is to burn it to produce heat and electricity, biofuels are one of the few technologies currently available that have the potential to displace oil and provide benefit to the transport system. There are real opportunities to develop efficient biofuel supply chains that can deliver substantial greenhouse gas savings. Biofuels on their own cannot deliver a sustainable transport system and must be developed as part of an integrated package of measures, which promotes other low carbon options and energyefficiency, as well as moderating the demand and need for transport. Given that biofuels are already in the market, however, it is vital that policies that promote biofuel development also address the environmental, economic and social impacts, so that they are made to perform their task effectively. Our conclusion that biofuels are potentially an important part of the future is therefore tempered with severalcaveats (covered in the report).