The optimal design of biofuels production systems is a key component in the analysis of the environmental and economic performance of new sustainable transport systems. In this paper a general mixed integer linear programming modelling framework is developed to assess the design and planning of a multi-period and multi-echelon bioethanol upstream supply chain under market uncertainty. The optimisation design process of biofuels production systems aims at selecting the best biomass and technologies options among several alternatives according to economic and environmental (global warming potential) performance. A key feature in the proposed approach is the acknowledgement of an economic value to the overall GHG emissions, which is implemented through an emissions allowances trading scheme. The future Italian biomass-based ethanol production is adopted as a case study. Results show the effectiveness of the model as a decision making-tool to steer long-term decisions and investments. (C) 2011 Elsevier Ltd. All rights reserved.