This paper reviews the evolution of biofuel policies in the United States, because it is by far the largest market for biofuels, and the European Union, because the use of oilseed crops for biodiesel, including palm oil, poses particular risks for tropical forests and for climate change. The paper analyzes the economics and politics behind these policies, and shows that agricultural interests played a more influential role than is often recognized. By contrast, specific measures to ensure that these policies are sustainable and assist with climate change mitigation in practice came later and remain inadequate. In sum, biofuel support is one more way that American and European policymakers support agriculture at the expense of important developing country interests.