This study for the biofuels feedstocks and biofuels production shows how to structure a relevant decision problem, incorporate a mathematical theory, develop a decision framework and use it for answering practical and real-world sustainability and optimization questions. The presented methodological and theoretical approach can be used by decision makers to improve and facilitate decision-making processes of complex multi-criteria problems.
For the past three decades, biofuels have emerged as a renewable energy source, and several policy instruments have been implemented by the US government, to date, to boost biofuels production and consumption. This trend has been triggered by many economic, environmental and social benefits of biofuels production and consumption, e.g., insuring national food security, reducing greenhouse gas emissions and supporting rural communities. Currently, biofuels policy is one of the most relevant policies impacting the fuel market; while the growing policy support for biofuels in the form of tax credits, subsidies and loans has the aim to comply with sustainability standards and contribute to ‘greening’ the economy and the environment.
Most evaluations of the biofuels policy are focused on tangible marketeconomic criteria, such as production prices of biofuels feedstocks, price stabilities on national and international markets, food security, biofuels subsidy policies, growth and poverty issues or welfare economics. However, a number of economic, environmental and social objectives of the biofuels policy are intangible and therefore difficult to measure with standard econometric methods. Also, the econometric methods are not suitable for evaluating the relative importance of economic, environmental and social objectives or the relations between alternative policy options and these objectives, especially in the current situation of limited data and information availability on biofuels feedstocks.