**3. Results**

To analyze the effects of different policies, we take an investor's perspective. We assume a fuel producer already has facilities for producing fossil fuel. The producer has a choice to invest in biodiesel production to produce fuel blend, or to leave the business as is. The profitability of the operations with and without biofuel investment is analyzed under different policy types. In particular, we consider the cases with (i) no support (benchmark), (ii) a financial incentive, and (iii) a biofuel mandate reinforced by tax-relief and penalties.
