This paper addresses the strategic planning of an IBSC (integrated biofuel supply chain) using total annualized cost and total life cycle GHG (green house gas) emissions as economic and environmental criteria respectively. The IBSC for an extended planning horizon H (e.g. 10 years) is considered and horizon H is further subdivided into a set of discrete time intervals. For each of these subintervals the diesel and the biodiesel fuel consumption can be varied according to a predetermined value. A mixed-integer linear programming model of biodiesel production that takes into account infrastructure compatibility, demand distribution, size and location of biorefineries using the available biomass and carbon tax data is proposed. An important aspect of the proposed model is the inclusion of crop rotation conditions to assure the supply of biological feedstock. The price of biodiesel and any byproducts produced are included in the model. Inputs to the model are the quantity of biological feedstock, the cost of biomass transportation, as well as inventory and processing costs. The proposed model is illustrated in Part 2 of this work with an example of Bulgarian economy for planning period 2010 to 2020 when the objectives of the Renewable Energy Directive 28/2009/EC will be achieved. (C) 2016 Elsevier Ltd. All rights reserved.