Musk's assertion regarding biofuels was correct, but I think it was made within the context of using them as fuel. He didn't discuss many side-products that are generated during the production of biofuels.
The problem with counting "side effect" products is nobody ever takes into account the supply/demand for that product. Sure making enough biofuel for the entire US produces 100 tons of X. But if the worldwide demand for X is 5 tons, then you've now generated 95 tons of waste that needs to be disposed of.
However, the major side product of corn based biofules is distillers grain which is animal feed for Cows/pigs. There is enough demand there to actually consume all of the distillers grain produced.
