On August 25, 2016, researchers at the University of Michigan, led by research professor John M. DeCicco, Ph.D., published "Carbon balance effects of U.S. biofuel production and use," a study examining the impact of biofuel production on carbon dioxide (CO₂) emissions. The study, funded in part by the American Petroleum Institute, examined USDA crop-production data and determined that the increasing use of biofuels has resulted in a net increase of CO₂ emissions, with only 37 percent of CO₂ emissions from biofuel combustion offset by the increased CO₂ uptake from biofuel crops. Biofuels have generally been assumed to be inherently carbon neutral because the CO₂ released by combustion is equal to the CO₂ that was originally pulled from the atmosphere through photosynthesis. In this study, Dr. DeCicco did not assume that biofuels were carbon neutral, going through crop, biofuel, and fossil fuel production data, as well as vehicle emissions, to determine that biofuels produce more CO₂ emissions than gasoline.

MichBio, Michigan's biosciences industry association, issued a strong condemnation of the study, calling it "flawed" and based on inappropriate modeling assumptions. The lifecycle analysis used by Dr. DeCicco provides a carbon storage credit to fossil fuels from existing forests and agriculture that MichBio argues is wholly inappropriate due to the lack of an economic relationship between the petroleum industry and agriculture and forestry. MichBio concedes that biofuels are not carbon neutral, but states that the issue is more complex than Dr. DeCicco implies: "No competent life cycle assessment assumes that biofuels are carbon neutral, only that the actual carbon content of the fuels came from the atmosphere in the first place and returns to the atmosphere when it is combusted. That much is simple chemistry, and without argument. For the rest of the biofuel life cycle, the question of carbon neutrality is very much a research question, not a decided issue as DeCicco would have one believe." MichBio goes on to reference an independently funded study by the U.S. Department of Energy (DOE) Argonne National Laboratory that showed "conventional biofuels reduce greenhouse gas emissions by an average of 34 percent over their lifecycle, while advanced biofuels can reduce emissions by 100 percent or more over conventional gasoline."