In this study an economic, environmental and sustainability assessment is conducted on a potential large scale biofuel industry in Suriname, South America, by applying System Dynamics. Suriname faces important energy related questions for the future, this with the eye on the growing economy and energy demand and the responsibility in terms of climate issues and biodiversity and forest conservation. Biofuels possess great potential to clean up the energy supply for both power generation and transport. Developing a biofuel industry in Suriname will pay off in the future under the condition that a) sufficient government incentives are implemented as a catalyst in the development of a biofuel industry and market b) the policy not only addresses export, but also establishes a local demand to cope with the uncertainty of the international biofuel market and also to establish local CO2 reduction and energy security and c) sufficient environmental and forest preservation law is implemented with a strict control mechanism. When taking these measures in developing Surinamese biofuel policy, the negative consequences regarding deforestation and the environment are minimized, while the positive impacts regarding energy security, CO2 emission reduction, agricultural development, rural development, renewable energy and economic growth and diversification are maximized.