Campaigners warn that biofuels could produce up to six times the carbon emissions of petrol due to deforestation.
The RSPB, ActionAid and Nature Kenya have criticised plans to clear Kenyan woodlands to plant jatropha, which can be used to make "green" fuels.
They say that clearing thousands of hectares of the Dakatcha Woodlands will generate up to 2.5 to six times more carbon emissions than using fossil fuels.
The deforestation could also damage the livelihoods of 20,000 people who rely on the woodlands and destroy the habitats of a number of threatened species of animals and birds.
Fuel produced from the seeds of the jatropha plant is set to be used to generate "green" heat and electricity in Kenya and Europe.
But the campaigners say they could also be used to make biofuels for European vehicle tanks to meet EU targets for 10 per cent of all transport fuels to come from renewable sources by 2020.
In the UK, biofuels already make up 3.5 per cent of the diesel and petrol sold on forecourts, but much of it does not measure up to voluntary sustainability standards.
Biofuels should reduce greenhouse gas emissions as they use renewable crops such as oilseed rape and sugar cane instead of fossil fuels.
However the environmental groups want to halt the plans for the Dakatcha woodlands due to emissions from clearing them and are calling for subsidies and targets for biofuels to be scrapped.
Dr Helen Byron, the RSPB's Kenya expert, said: "The Dakatcha Woodlands are a haven for wildlife and the threat they face is a direct result of European demand for biofuels.
"The proposed plantation is just one example of the disastrous but unseen impact of biofuels on the climate, nature and people - there are plenty more coming to light all the time."
She called on ministers to adopt an ambitious programme to reduce emissions from cars through improving efficiency and a large-scale roll-out of electric vehicles.
Tim Rice, ActionAid's biofuels expert, said: "Biofuels are far from the miracle climate cure they were thought to be. Like most other biofuels, jatropha could actually end up increasing carbon emissions.
"Crucially, the Dakatcha case also shows how biofuel plantations can create huge social upheaval with whole communities losing their land, homes and jobs."