Are Bio-diesel And Bio-ethanol Really That Much Better For The Environment?

The case in favour of bio-diesel/bio-ethanol fuels is strong.  These are basically alcohol concentrates produced from grain and oil-seed crops, that can be used as substitutes for petrol or diesel, especially in running a road vehicle.  Unlike petroleum products, the bio-crops are carbon neutral.  Petrol is a distilled product from a carbon source that was buried far underground many millions of years ago.  When petrol/diesel is burnt, it produces many by-products that enter the atmosphere as climate- (and respiratory-) damaging gases, especially carbon dioxide.  Bio-fuels release carbon dioxide, too, when burnt.  But this is CO2 that was only scavenged from the atmosphere in the last year or so, it isn't creating a net addition in atmospheric CO2.

There are a few worries about bio-fuels, though.  They typically need a LOT of fresh water to produce, and fresh water itself is a precious world resource.  Plus, in a crowded and hungry world, should we really be wasting food crops on making fuel to run our cars?  Plus, are bio-fuels just perpetuating an unsustainable life-style, because bio-fuels may never be able to supply all our vehicle fuel needs?