Journal of Cleaner Production 176 (2018) 304e319

Contents lists available at ScienceDirect

Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

Sustainable fuel portfolio optimization: Integrated fuzzy

multi-objective programming and multi-criteria decision making
Mohammad-Hadi Sehatpour, Aliyeh Kazemi*
Department of Industrial Management, Faculty of Management, University of Tehran, Tehran, Iran

a r t i c l e i n f o a b s t r a c t

Article history: The chronic illness of transportation sector is its excessive dependence on petroleum products that
necessitates immediate actions to mitigate negative externalities. Developing an environmentally
benign, economically feasible, and socially acceptable fuel portfolio can generally, improve the sus-
Keywords: tainability of future transportation systems. This study aims to predict an optimal fuel portfolio based on
Fuel portfolio optimization different concerns for light-duty vehicles of Iran in the light of alternative fuels until 2025. Six potential
Transportation alternative fuel
fossil and renewable fuels including gasoline, diesel, compressed natural gas (CNG), liquid petroleum gas
Multi-objective programming
(LPG), a mixture of 85% ethanol and 15% gasoline (E85) and biodiesel, and one gasoline-electric hybrid
Light-duty vehicle
Biofuel
technology competed through an integrated fuzzy multi-objective programming. Seven goals with
environmental, cost, social and policy nature, as well as systematic constraints and fuel priority (obtained
by the application of a multi-criteria decision making (MCDM) method) had to be met in the model. The
solution of the model along with the sensitivity analysis of weights and aspiration levels indicated that
with an acceptable possibility of achieving the goals, CNG had the greatest share in the optimal fuel
portfolio followed by gasoline, LPG and diesel. Through the intended horizon, the fossil fuels’ share has
declined such that 13.5% of the optimal portfolio was replaced by hybrid technology, biodiesel and E85 in
2025, and more importantly, carbon dioxide emission and fuel cost could be mitigated by 11% and 18%,
respectively in the same year. Two scenarios focusing on environmental and cost goals were defined
through assigning 70% and 80% of the weights to the related goals, respectively; the results revealed that
the main characteristics of the optimal portfolio were stable. Likewise, the analysis of the aspiration and
tolerance levels of the goals proved the stability of the model and revealed that these parameters play a
sensitive role in the model and could affect the optimality and feasibility of the solutions.
© 2017 Elsevier Ltd. All rights reserved.

1. Introduction and Distribution Company (NIORDC) in 2014, road transport and

The importance of transportation as a fundamental part of the
economy of any country is such that it is introduced as an indicator
of development. Having a significant contribution in the production
of national value-added, the transportation sector, basically affects
the production growth in any society (Achour and Belloumi, 2016).
During the past two decades, Iran's transportation sector had
accounted for a high proportion of energy consumption so that,
after the residential and commercial sectors, this sector is the
second largest final energy and the first petroleum products con-
sumer. According to the statistics of National Iranian Oil Refining
* Corresponding author. Nasr Bridge, Chamran Highway, PO Box: 14155e6311,
Tehran, Iran.
E-mail address: aliyehkazemi@ut.ac.ir (A. Kazemi).
more specifically light-duty vehicles (LDVs) have been in charge of
more than 99% of the total gasoline consumption in the trans-
portation sector (IFCO, 2012; MOE, 2014; NIORDC, 2014). Conse-
quently, considerable amount of greenhouse gases (GHGs) is
emitted every year in Iran such that it has put this country among
the ten first carbon dioxide (CO2) producers in the world in 2014.
Moreover, around 31% of the overall energy consumption (158.7
million barrels of oil equivalent (MBOE)) was assigned to the
transportation sector in 2014, making it responsible for 49.69%,
79.76%, 24.93%, 97%, and 45% of total NOx, SPM, CO2, CO and SOx
emissions (MOE, 2014; NIORDC, 2014; Statistics, 2015). In terms of
quantity, energy consumption in Iran released around 602 million
tons of CO2 in 2014 of which approximately 150 million tons were
emitted by the transportation sector.
Air pollution, especially in the mega cities of Iran, figures
prominently among the main environmental causes, which affect

https://doi.org/10.1016/j.jclepro.2017.12.092
0959-6526/© 2017 Elsevier Ltd. All rights reserved.
 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319
Nomenclatures
X n-vector with components x1, x2, …, xn (decision
variables)
m Membership function (MF)
BX
b System constraints
G Number of goals
wi Relative weight of the ith goal
fi ðXÞ Value of the ith goal
fi* Aspiration level (AL)
fimin Lower tolerance limit
fimax Upper tolerance limit
FV Future value
PV Present value
IR Inflation rate
n Number of periods
human health. A study on air quality in Tehran (capital of Iran)
revealed the mortality risk associated with particulates as being at
4000 deaths per year due to this pollutant (Shafie-Pour et al., 2007).
Beside the transportation's exclusive dependency on fossil fuels,
energy consumption in all sectors of Iran, especially transportation
sector does not follow basically an appropriate pattern. While about
10% of the country's production resources are spent on trans-
portation, the value-added coming from this sector is about 8%
(MOE, 2014). Consequently, the modification of energy consuming
pattern has a great matter of importance in this sector, which can
be investigated to several sub-sectors such as transportation navi-
gation, infrastructures, road transport structure and new fuels and
technologies (Sehatpour et al., 2017). Currently, LDVs compose
around 90% of Iran's road transportation navigation, and about 65%
of the fuel demand of this type of vehicles is supplied by gasoline
while diesel, compressed natural gas (CNG) and liquid petroleum
gas (LPG) contribute by 9%, 22% and 4%, respectively to supply the
rest of the demand (IFCO, 2012). One cannot help but notice that
such layout is not only inefficient but also does not satisfy the
preliminary concerns of sustainability. Moreover, absence of bio-
fuels should be addressed by evaluating and considering this family
of fuels to let the road transport navigation utilize their numerous
favorable characteristics. On a life cycle analysis basis, the corn-
based and cellulosic ethanol production and use reduce the emis-
sion of GHGs by up to 52% and 86%, respectively, as compared to the
petroleum gasoline production and use. Similarly, the combustion
of biodiesel at different ratios reduces CO2 emissions
(Sadeghinezhad et al., 2014). Moreover, by using the same amount
of heat, the combustion of natural gas produces about 30% less CO2
than petroleum, and as a low-carbon-emitting hydrocarbon fuel,
LPG emits 19% less CO2 than oil (Salvi et al., 2013). On the other
hand, hybrid vehicles, which utilize both electrical and internal
combustion engines for propulsion, are presently providing solu-
tion for the problem of dependence on traditional fuels, emissions
of growing CO2, and other environmental concerns (Adnan et al.,
2017).
Over the last decades, energy planning has entirely changed
from the almost sole concern with the cost minimization of the
supply-side choices to the need for explicitly multiple and poten-
tially conflicting objectives, involving different groups of actors.
This complex environment indicates the multi-objective nature of
the issue (San Cristo  bal, 2012).
Determining the arrangement of various fuels in the transport
fuel portfolio and the realization of their supply in the intended
horizon require comprehensive studies on the development of the
305
A Alternative
gj(.) Level of performance for each alternative against
each criterion
d Difference between the alternatives' performances
against each criterion
p Preference level
q Indifference level
S Superiority matrix
I Inferiority matrix
f > ð:Þ Superiority flow
f < ð:Þ Inferiority flow
fn Net flow
fr Relative flow
ℝn Complete ranking based on net flow
ℝr Complete ranking based on relative flow
energy supply system in this sector. In this regard, via a fuzzy goal
programming (GP) and considering the 2025 horizon it has been
tried to develop the Iran's road transportation fuel portfolio, while
taking into account several concerns including environmental, cost,
social and policy as the objectives. Moreover, evaluation of current
fuels is done using a multi-criteria approach, and the results as well
as the systematic limitations will be applied to the model as crisp
constraints. Two different weighted scenarios are defined to test
the stability of the model and address the differences in the deci-
sion-makers’ priorities, including one with more focus on the
environmental concerns and a cost-oriented scenario.
The rest of the paper is structured as follows: Section 2 presents
a comprehensive literature survey of the applied methodology to
provide an insight about the research gap in the related scope.
Section 3 introduces the integrated approach and the details of the
model employed in this study. In Sections 4, the results of the
optimization model along with sensitivity analysis of the results,
review of the future demand through the optimal portfolios, and
related policy regarding the implications of the optimal fuel port-
folios are presented. Finally, Sections 5 presents concluding re-
marks, limitations, and recommendations for future works in
accordance with the findings of this research. Definition of the
goals considered in the model is presented in Appendix A.
2. Literature review and research motivation
Developing and optimization of an energy portfolio is a multi-
actor and sophisticated problem due to the need for incorpo-
rating conflicting quantitative and qualitative considerations.
Evidently, multi-criteria decision making (MCDM) framework is
proposed highly in the literature to deal with such a problem
effectively. Multi-attribute decision making (MADM) and multi-
objective decision making (MODM) represent two main cate-
gories of MCDM methods. MODM approaches are, generally,
employed to design by considering trade-off relationships among
design constraints, while MADM models focus on solving problems
involving selection from different sets of decision alternatives
(Onat et al., 2016). As a branch of MODM, goal programming is used
to handle multiple and normally conflicting objectives. Although
the setting of appropriate weights in a GP model and Pareto-
optimality of the solutions has raised debate, effectiveness of this
approach, especially in problems with relatively large number of
both quantitative and qualitative variables, constraints and objec-
tives is quite considerable (Chiandussi et al., 2012).
Being used frequently by many researchers in energy portfolio
306 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319
planning, fuzzy GP approach facilitates development of goals with
imprecise targets and flexible technological coefficients method-
ology to respond the intended targets (Talaei et al., 2016).
In recent years, many have contributed relevant research works
addressing the developing and optimization of energy portfolio. For
example, Zeng et al. (2015) developed a multi-objective model for
energy generation portfolios. The decision making model could
determine the proportion of different energy generation sources in
an investor-owned utility portfolio. Based on four scenarios of
improvements in technology, energy security requirements,
decreasing petroleum prices and government subsidies, Romejko
and Nakano (2016) analyzed the portfolio of alternative fuel vehi-
cles. The projected deployment of alternative fuel vehicles in
transportation systems in this study mostly occurred in the form of
lorries (trucks) and passenger vehicles. Onat et al. (2016) developed
a multi-objective optimization model to calculate the optimal dis-
tribution of passenger cars in the U.S., taking into account the
conflicting environmental and socio-economic objectives. In this
work, sixteen macro-level sustainability impacts were assessed for
seven different vehicle types. Moreover, various distributions were
presented in accordance with the relative importance assigned to
each indicator, with different weighting scenarios applied to ac-
count for variability in decision-makers’ priorities. Behboodi et al.
(2016) answered the question of "what is the optimal installed
capacity allocation of renewable resources in conjunction with
demand response?", by introducing an integrated model for total
annual system cost that could be used to determine a cost-
minimizing allocation of renewable asset investments. The model
included production, uncertainty, emission, capacity expansion,
mothballing costs, wind variability, and demand elasticity. Mozafar
et al. (2017) formulated a multi-objective optimization problem for
optimal allocation of renewable energy sources and electric vehicle
(EV) charging stations simultaneously and managing vehicle
charging process. Concerns such as wind speed, solar radiation, and
hourly peak demand ratio for the management of the EV charging
pattern in off-peak load hours were taken into consideration, and
genetic algorithm-particle swarm optimization (GA-PSO) hybrid
was used to solve the optimization problem in five different sce-
narios. Daim et al. (2010b) used objective data to find the energy
policy priorities that yield the existing energy portfolios of France
and Germany. In this study, a hierarchical decision model was
developed and analyzed backward using the GP to identify the
priorities of criteria in a variety of technology alternatives and
taking into account technical, political/social and economic aspects.
Mitchell (2015) used the GP and analytical hierarchy process (AHP)
to aid in the selection of an optimal energy portfolio or mixture
when faced with multiple alternatives and multiple criteria. In this
paper, AHP weights were applied in the GP model to objectively
determine the best solution with regards to job creation, CO2
emissions, and cost. Daim et al. (2010a) established a model to
create a renewable energy portfolio using guidelines drawn by
Oregon's renewable portfolio standard (RPS) legislation with the
objective of responding to a 25% of the state electricity demand by
renewable resources in 2025. The model was able to reveal the
costs and benefits of complex decisions regarding renewable en-
ergy. Gao et al. (2014) used portfolio theory to optimize China's
overall energy system with considering the learning curve effect of
renewable energy cost and the characteristics of fossil energy cost
increasing over time. In this study, additional factors such as the
environmental costs of coal consumption and various growth rates
of the cumulative research and development (R&D) capacity for
solar power were considered. Through additional literature review,
Daim and Cowan (2010) developed a model to consider all factors
and perspectives required in developing a portfolio of renewable
energy technologies. A limited demonstration with GP and
scenarios was included, and the case of the state of Oregon was
used to demonstrate the approach. Tzeng et al. (1994) applied an
integrated MODM model to deal with energy supply mix problems
in Taiwan. The analyzed outputs of this research included alterna-
tives, the preferred solution, and the best compromise solution,
which were delivered as a basis for decision making.
2.1. Research motivation and objectives
As it is obvious through the literature, most of the research
works have been done focusing on energy generation, and lack of
investigations in assessing the optimized energy portfolio consid-
ering multiple concerns with conflicting nature in transportation
sector, especially in Iran, is genuinely tangible. Although some
studies have been conducted about alternative fuels in the trans-
portation sector, optimal diversification of fuel portfolio in view of
the systematic limitations and future demand has not been
addressed effectively. As a result, the current research aims to fill
the research gap by presenting an innovative combination of
MCDM branches. Given this, the current study will develop a multi-
objective model to find the optimal arrangement of the fuel port-
folio of LDVs in Iran while interactions between the environmental,
cost-related, social and policy-related concerns are taken into
account.
The main objectives of the present research are as follows:
 Exploring the suitability of different fuels and technologies
including conventional and new cleaner fuels for LDVs, and
designation of controlled levels of the first presence of new fuels
in Iran's transportation fuel portfolio
 Providing a practical decision-making platform for policy-
makers that simultaneously integrates the fundamental and
controversial concerns by developing a fuzzy approach in opti-
mization of transportation fuel portfolio and employing dy-
namic data in a mid-term horizon
 Investigation of the optimal portfolios in the presence of the
future demand that provides the insight to illustrate the up-
coming path, and consequently, moderate the risks associated
with supply security.
This study would be a novel decision support framework in Iran
for the authorities of related sections who can review the goals and
weights in the light of the results.
3. Methodology
Considering the only concern of costs minimization would turn
the decision problem into a relatively simple form. As it is often
expensive to utilize environmentally friendly systems, the mini-
mization of costs and environmental burdens is usually a contra-
dictory objective. Similarly, when some other aspects such as
environmental concerns as well as the costs have to be minimized,
the problem becomes more challenging (Ren et al., 2009). Obvi-
ously, selection of the energy carriers' portfolio for transportation
sector is inherently a multi-objective problem where several issues
must be accounted for. Considering multiple concerns and criteria,
in this research, a fuzzy GP along with a multi-criteria decision
making (MCDM) approach called superiority and inferiority
ranking (SIR) was applied to develop a decision model in order to
optimize the transportation sector's fuel portfolio. Fig. 1 shows the
outline of the optimization model.
3.1. Fuzzy goal programming
GP is a method used to pursue the best solution in the presence
 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319 307

Decision variables
(Recognition of alternative fuels)

Goals (Recognition of goals and Optimization Sensitivity analysis of the

setting weight for each goal) (Fuzzy multi-objective programming) optimal fuel portfolio

Evaluation of Constraints (Evaluation of alternative

alternative fuels (SIR) fuels and systematic constraints)

Fig. 1. Optimization model framework.

of multiple objective functions that need to be satisfied. The ob- possible value interval for a fuzzy objective function can be esti-
jectives are set up as constraints, and a GP solution seeks to find the mated based on the decision maker's experience. Figs. 2 and 3 show
solution that best satisfies the constraints (Yılmaz Balaman and the graphs of continuous linear MFs for both maximization and
Selim, 2016). Belongingness of an element to a certain set with a minimization purposes, respectively.
degree of membership m is the main difference between crisp and
fuzzy sets, and the membership function (MF) in the given set is
3.2. Model developing
defined by mf ðXÞ, which has a value between 0 and 1. The closer it is
to 1, the greater the belongingness will be. Defining the tolerance The process of fuel portfolio optimization needs to start with
limits and the aspiration levels (ALs) of the MF constraints would be defining the basic parameters of the model, including fuels and
the main step of characterizing fuzzy goals. goals along with their aspiration and tolerance levels, and finally,
In a weighted GP problem, membership is to be maximized. the systematic constraints. Six fuels with both fossil and renewable
Consider a weighted fuzzy GP of G number of goals, the base model bases and a hybrid technology were included in this research.
would be as below (Tiwari et al., 1987): Moreover, through a comprehensive review of relevant literature
and considering both global and domestic concerns, the goals were
X
G
selected. Regarding the nature of each goal, the aspiration and
Max wi mfi ðXÞ
tolerance levels were defined by the experts and decision makers or
i¼1
s:t: via calculation process. Finally, the constraints were added. Since
mf1 ðXÞ some of the data are linguistic, the crisp values were defined ac-
mf2 ðXÞ (1) cording to the 5-point Likert scale, taking the exact number for the
« terms very low, low, medium, high, and very high as 1, 2, 3, 4 and 5,
mfG ðXÞ respectively. The following sections scrutinize the details of
0
mfiðXÞ
1; i ¼ 1; :::; G entering each parameter into the model.
BX
b
X0
3.2.1. Fuels
Exclusive dependency on fossil fuels, primarily gasoline in Iran's
where, X is an n-vector with components x1, x2, …, xn (decision
transportation sector, may bring about numerous unfavorable
variables), BX
b are system constraints, wi is the relative weight
P strategic and environmental consequences; however, removing
of the ith goal, and G i¼1 wi ¼ 1. this family of fuels seems to be impractical in short-term. Regarding
Each goal, either maximization or minimization, is limited to an the need for diversification in Iran's transportation fuel portfolio,
AL. The MF for the goal desired to be minimized is defined as: the proven fuels with both fossil and renewable bases and a hybrid
8 technology were investigated in this study. The fossil fuels include
>
<  1.  ; fi ðXÞ
fi* gasoline, petroleum diesel, CNG and LPG. Also a mixture of 85%
mfi ðXÞ ¼ 1 fi ðXÞ  fi*
fimax  fi* ; fi*
fi ðXÞ
fimax ethanol and 15% gasoline (called E85) and pure biodiesel (called
>
:
0 ; fi ðXÞ  fimax
(2)
fi ( X )

and if the goal targets are to be maximized, then:

8
>
>
<  1.  ; fi ðXÞ
fi*
mfi ðXÞ ¼ 1 fi*  fi ðXÞ fi* fimin ; fimin
fi ðXÞ
fi*
>
>
: 0 ; fi ðXÞ  fimin 1

(3)

where, fi* is the AL, fimin is the lower tolerance limit, and fimax de-
notes the upper tolerance limit of the ith goal (fi ðXÞ). Equations (2)
and (3) are non-increasing continuous linear MFs, which can be
0 fi ( X )
specified by requiring the decision maker to select the goal value fi* f i max
interval of the uppermost and the lowest limits. Theoretically, the
membership grade is in the interval ½0; 1 while the equivalent Fig. 2. Continuous linear MF for the goal desired to be maximized.
308 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319
fi ( X )
1 flexibility, regarding the current fuel portfolio cost.
0
fi ( X )
fi min f i*
Fig. 3. Continuous linear MF for the goal desired to be minimized.
B100) was considered. Last but not least, electric-gasoline hybrid
was taken into account, which refers to the vehicle that consumes
gasoline as a source of primary energy and combines a conven-
tional propulsion system with a rechargeable energy storage sys-
tem to reach better fuel economy (Safaei Mohamadabadi et al.,
2009). An optimal combination of these fuels and technology
would play a feasible and optimal role in this sector, and expec-
tantly pave the way for balancing the oil products' share in sup-
plying the transportation sector's fuel demand.
3.2.2. Goals
An optimized portfolio was developed based on the relevant
defined goals that must be capable of meeting the concerns of
decision makers. The following goals were taken into the account:
Goal 1: CO2 emission minimization.
Goal 2: Fuel cost minimization.
Goal 3: Implementation cost minimization.
Goal 4: Energy security maximization.
Goal 5: Social acceptance maximization.
Goal 6: Price stability maximization.
Goal 7: Fuel smuggling minimization.
Further information about these goals is presented in Appendix
A.
3.2.3. Fuels data and aspiration and tolerance levels
In order to complete the goals-related parameters in the model,
the ALs and tolerances should be defined or determined properly.
The goals data were collected using experts from both the research
and industrial companies in the field and harmonized bibliography.
In this study, the ALs of goals 1 and 2 were calculated based on the
CO2 emission and fuel cost of typical vehicles, traveled 100 km,
using each type of intended fuels. Based on the results of Shapiro-
Wilk and KolmogoroveSmirnov's tests, it was concluded that the
CO2 emission data were normally distributed with a quite accept-
able approximation (Sig. Shapiro-Wilk ¼ 0.168 and Sig. Kolmogor-
oveSmirnov ¼ 0.128). Given the results, the average and the standard
deviation of CO2 emissions of the regarded fuels were considered as
aspiration and tolerance levels, respectively.
In order to set the AL for the fuel cost concern, an approach,
based on the annual per-capita gross domestic product (GDP) and
the individual cost of supplying energy for transportation, was
pursued. As the real sector of economy statistics reveals, the
growing rate of GDP in Iran has had a reversal trend from 2010 to
2013, mainly due to the tightening of international sanctions and
crude oil price drop, while after 2013, the GDP growth resumes, yet
not touching the peak level of 2010 (MOE, 2014; Sieminski, 2014).
On the other hand, around 5% of the individual incomes are spent
on energy expenditure, of which 2% is assigned to the procurement
of transportation fuels Given the first year per-capita GDP and the
last year per-capita energy demand and the share of fuel cost from
the per-capita GDP, the AL for the second goal was determined
while the tolerance levels were considered 30% to raise the model
Due to the relatively high inflation rate in Iran, applying current
cost data for upcoming years could not reflect the actual prices in
the future. On the other hand, the fuel pricing policy in Iran involves
a high level of complexity so that fuel prices neither rise according
to the annual inflation rate, nor are significantly influenced by the
crude oil price fluctuations. In this research, considering the growth
pattern of fuel prices, especially after the energy subsidy reform in
Iran, fuel price data were raised once every three years (in 2020 and
2023) with regard to 10 percent inflation rate per year using future
value relation as presented in Eq. (4):
FV ¼ PV  ð1 þ IRÞn (4)
where, FV, PV, IR and n imply future value, present value, inflation
rate and the number of periods, respectively.
Implementation cost (goal 3) refers to both the acquisition of a
vehicle powered by each of the six different fuels or the hybrid
technology and the associated infrastructure costs (Tsita and
Pilavachi, 2012). To deal with the wide range of vehicles with
different features and prices, linguistic data for this goal were
provided.
Approaching the unsubsidized prices and developing the tech-
nology for domestic production of biofuels, both biodiesel and E85,
will gradually get quite competitive through the intended period
while their prices were assumed to be constant. The AL for the
second goal was raised proportional to the growth rate of incomes,
which was supposed to be close to the inflation rate. Similarly, the
implementation costs were expected to be comparatively constant
except for the hybrid technology, which due to such policies as the
tariff exemption of importing and localization of their
manufacturing technology was assumed to get greatly affordable in
the horizon of 2025, so the related data were updated in the model
year by year starting from 2020.
Given the current situation of transportation in Iran, the energy
security of the fossil fuels is relatively higher than that of the new
fuels; however, one level of growth was assumed for them in the
last three years. Similarly, social acceptance and fuel price stability
of the new fuels and the hybrid technology were supposed to
progress through time owing to different economic and social
policies. Consequently, the related data in these two goals were also
updated starting from 2020. The fuel price disparity between Iran
and her neighbors like Turkey, Pakistan and Afghanistan, which
mainly stems from heavy subsidies on fossil fuels, stimulates the
fuel smuggling through the borders. Taking the Iran's ongoing
subsidy reform plan, one level of reduction for gasoline and diesel,
in the three last years, was pursued while the situation of E85 and
biodiesel was assumed to be constant during the period (Sehatpour
et al., 2017).
Finally, a weight for each goal is required to let it be considered
at a controlled level of importance, depending on the perspective of
the decision-makers. The experts were asked to respond based on
their experience while the circumstances are ideal. The weights of
all goals and technical data are presented in Table 1. The ALs and
tolerances are given in Table 2.
3.2.4. Constraints
Realizing the inevitable conditions and limitations will increase
 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319 309

Table 1
Fuel data for 2017.

Goals Fuels Weight

Gasoline Diesel CNG LPG E85 Biodiesel Electric-gasoline hybrid

CO2 emission (kgCO2 eq/100 km) 23.08 18.39 17.49 18.43 17.64 9.21 16.36 22%
Fuel cost ($/100 km) 2.2 0.6 0.006 0.43 6.13 5.38 1.6 17%
Implementation cost Low Medium Medium Medium Low Medium Very high 20%
Energy security High High Very high High Medium Low High 10%
Social acceptance Very high High High High Medium Medium Medium 11%
Price stability High High Medium Low Low Low Medium 12%
Fuel smuggling High Very high Very Low Low Low Low Low 8%

Table 2
Aspiration levels and tolerances.

Goals Aspiration levels Tolerances in maximization (%) Tolerances in minimization (%)

CO2 emission (kgCO2 eq/100 km) 17.3 25

Fuel cost ($/100 km) 1 30
Implementation cost Medium 30
Energy security High 20
Social acceptance High 20
Price stability High 20
Fuel smuggling Low 20

the effectiveness of the model. In the current study, constraints in

two categories of ranking and systematic were applied to the X
m X
m  
model. Sj ðAi Þ ¼ pj ðAi ; Ak Þ ¼ fi gj ðAi Þ  gj ðAk Þ (6)
k¼1 k¼1

X
m X
m  
3.2.4.1. Ranking of fuels. Applying the SIR method, fuels were Ij ðAi Þ ¼ pj ðAk ; Ai Þ ¼ fi gj ðAk Þ  gj ðAi Þ (7)
evaluated using defined goals as criteria (with specified weights) of k¼1 k¼1
the ranking model. The SIR method is a significant extension of the The superiority matrix (S-matrix) and inferiority matrix (I-ma-
well-known PROMETHEE method developed by Xiaozhan Xu. This trix) are obtained which are constituted by Sj(A) and Ij(A), respec-
technique uses two types of information (superiority and inferi- tively. These two values (called superiority and inferiority scores)
ority) in order to derive two types of flows, the superiority flow and are determined by the summation of the intensity of superiority
the inferiority flow, by which the set of alternatives are ranked and inferiority of the alternative A compared to the other alterna-
partially or completely (Xu, 2001). tives through Eqs. (6) and (7).
3.2.4.1.1. The superiority and inferiority matrices. After defining S ¼ ðSj ðAi ÞÞmn is the superiority matrix, and I ¼ ½Ij ðAi Þmn de-
the thresholds and weightings for criteria, decision makers must notes the inferiority matrix (Tam et al., 2007).
enter the level of performance gj(.) for each alternative against each 3.2.4.1.2. Aggregation procedure: superiority and inferiority flows.
criterion. The decision matrix formed by these criteria values would In this step, the superiority flow (S-flow) f > ð:Þ and the inferiority
be as follows: flow (I-flow) f < ð:Þ are formulated using the superiority and infe-
0 1 riority scores along with the weightings in Eqs. (8) and (9):
g1 ðA1 Þ ::: gj ðA1 Þ ::: gn ðA1 Þ
B ::: ::: ::: ::: ::: C
B C X
n
D¼B
B g1 ðAi Þ ::: gj ðAi Þ ::: gn ðAi Þ C
C f > ðAi Þ ¼ Wj Sj ðAi Þ (8)
@ ::: ::: ::: ::: ::: A j¼1
g1 ðAm Þ ::: gj ðAm Þ ::: gn ðAm Þ

Six different preference functions can be chosen based on the X

n
knowledge about criteria. These functions, which cover the most f < ðAi Þ ¼ Wj Ij ðAi Þ (9)
practical applications, include: usual, U-shaped, V-shaped, level, j¼1

linear and Gaussian (Brans et al., 1986). Among the preference The above aggregation method is extracted from the simple
functions, types 1, 2 and 4 are discrete while the three others are additive weighting (SAW) model.
fuzzy, and to employ them, the following parameters are to be 3.2.4.1.3. SIR ranking. In a complete ranking, two parameters
0 0
defined as d ¼ gðAÞ  gðA Þ, in which gðAÞ and gðA Þ are perfor- called net flow (fn ðAi Þ ¼ f > ðAi Þ  f < ðAi Þ) and relative flow
0
mance values of A and A , respectively, p is preference threshold, (fr ðAi Þ ¼ f > ðAi Þ=ðf > ðAi Þ þ f < ðAi ÞÞ) are defined (Xu, 2001). Given
and q is indifference threshold. any two alternatives of A and A':
On a pair wise basis, a comparison between the alternatives is
done. Using Eqs. (5)e(7) the preference relationships are found. - the complete ranking by n-flow (ℝn ) is
    0 
APA0 if fn ðAÞ > fn ðA0 Þ, and.
0
p A; A ¼ f gðAÞ  g A ¼ f ðdÞ (5)

- the complete ranking by r-flow (ℝr ) is

310 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319

Fig. 4. The process of SIR method (complete ranking).

Table 3
Assumption for all criteria.

Criteria Type of preference function Preference threshold Indifferent threshold Max./min.

CO2 emission (kgCO2 eq/100 km) Linear 2.5 kg 1 kg Min.

Fuel cost ($/100 km) V-shaped 1$ e Min.
Implementation cost V-shaped 1 e Min.
Energy security Linear 1 0 Max.
Social acceptance Usual e e Max.
Price stability Usual e e Max.
Fuel smuggling Linear 1 0 Min.

APA0 if fr ðAÞ > fr ðA0 Þ. price stability were fully achieved during the horizon. Moreover,
The process of SIR complete ranking is outlined in Fig. 4. the MF of implementation cost was above 0.89 all the time, and at
The assumptions for all criteria are shown in Table 3, and the the ending years of the period, the value was getting closer to 1. The
results of the ranking model (applied to the model as a set of possibility of two concerns of social acceptance and fuel smuggling
constraints) are presented in Table 4. reached above 60% in the last three years whereas; in the first years,
the values hardly went over 55%. Furthermore, the MF of CO2
emission reduction, as the first goal, was more than 45% in all years
3.2.4.2. Other constraints. Based on Iran's Sixth 5-year Develop-
while the MF value showed an improving amount through the
ment Plan in which the long-term plans during 2016e2021 have
time, reaching almost 50% in the last year. As it was supposed, a
been outlined, the overall share of diesel fuel in LDV fuel portfolio
reasonable footprint of conflict was obvious between the cost-
has been considered to be at least 5%; this condition was applied to
related goals and the CO2 emission. Getting more competitive
the model for the first five years of the period. Besides, the total
(and yet more expensive) in the last years of horizon, cleaner fuels'
share of CNG, gasoline and diesel was assumed to be more than 80%
share in the portfolio smoothly grew through the time, which was a
in all years. As directed by the public transport development and
proof for the first goal (CO2 emission) triumph over the cost-related
fuel consumption management workgroup, a dedicated share of at
goals, and exclusively implementation cost due to its relatively
least 5% for new technologies such as hybrid cars as well as biofuels
higher weight; however, a more strict aspiration and tolerance level
including ethanol and biodiesel was assigned and imposed to the
for the first goal had made it less possible to be completely ach-
model, starting from 2020.
ieved. Moreover, the possibility of CO2 reduction increased while
the implementation cost of MF reduced lightly, as another result of
4. Results and discussions the interaction between goals. Similarly, the possibility of social
acceptance maximization and fuel smuggling minimization
The model was run in LINGO 15.0.34 in order to maximize the increased as a result of new fuels and hybrid technology growth in
MFs of the goals, and subsequently, obtain the optimized percent- the portfolio, while this progress had a light reverse effect on both
age of the fuels' share in the fuel portfolio (Eqs. (1)e(3)). As it can be the third (implementation cost) and sixth (price stability) goals.
seen in Fig. 5, the goals including fuel cost, energy security and The goals’ MFs and the variations of optimum fuel diversity are
presented in Fig. 6. Also the variation of fuel portfolio in a 4 years
intervals is depicted in Fig. 7.
Table 4
Ranking of fuels. As shown in Fig. 6, CNG had a domineering role among the other
fuels, and more than 40% of the portfolio was assigned to this fuel,
Fuels Rank in 2017 Rank in 2020 Rank in 2023
whereas the share of CNG, gasoline and diesel reduced as time
Gasoline 2 2 2 passed, and LPG had a more stable situation in meeting the fuel
Petroleum diesel 4 4 6
demand during the time. The biodiesel and hybrid penetrated to
CNG 1 1 1
LPG 3 3 3
the portfolio gradually so that they earned 11.2% of the share in
E85 ethanol 6 7 7 2025, while E85 entering rate was not much high. Obviously, the
B100 biodiesel 5 6 5 fossil fuels’ share was substituted by that of cleaner fuels with the
Electric-gasoline hybrid 7 5 4 rates of 0.73%, 0.55%, 0.16% and 0.13% per year for CNG, gasoline,
 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319 311

100%

80%

60%

40%

20%

0%
2017 2018 2019 2020 2021 2022 2023 2024 2025
Year
MF1 MF2 MF3 MF4 MF5 MF6 MF7
Fig. 5. MFs values of the goals.

LPG and diesel, respectively. It is worth mentioning that the LPG
reduction rate was lower than that of gasoline and diesel, which is a
favorable incident. The share of CNG, gasoline, diesel and LPG
reduced by the rate of 5.9%, 4.4%, 1.3% and 1.1%, respectively, and the
share of hybrid technology, biodiesel and E85 rose to 6.8%, 4.4% and
2.3% within 2017e2025 with the rate of 0.85%, 0.55% and 0.29% per
year, respectively.
4.1. Sensitivity analysis
In order to test the stability of the obtained results, different
scenarios were defined focusing on the variation of goals’ weights
and ALs.
4.1.1. Sensitivity analysis of weights
Two scenarios with focus on environmental and cost goals were
defined.
A) Environmental scenario wherein 70% of the weight was
assigned to CO2 emission minimization goal and the others got 5%
of weight equally. In this scenario, the possibility of CO2 emission
minimization increased to about 65%, and except the 5th and 6th
goals, the rest of goals achieved the possibility of more than 90%.
The 5th goal hardly went over 30% while the 6th goal was never
met during the period. As shown in Fig. 8, the overall pattern did
not undergo a significant change. Similarly, CNG had a considerable
share in the portfolio in all years. In the first year of this scenario,
only a tiny portion of biodiesel and E85 entered to the portfolio due

60%

50%

40%

30%

20%

10%

0%
2017 2018 2019 2020 2021 2022 2023 2024 2025
Year
Gasoline Diesel CNG LPG E85 Biodiesel Hybrid
Fig. 6. Fuels' share in the portfolio.
312 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319
Biodiesel, Hybrid,
0.5% 0.0%
E85, 0.3%
LPG, 7.9%
Gasoline,
36.3%
CNG, 49.1%
Diesel, 5.9%
2017
Hybrid, 6.8%
Biodiesel,
4.4%
E85, 2.3%
LPG, 6.8%
CNG, 43.2%
2025
Fig. 7. Fuel portfolio variation in 4-year intervals.
to the higher weight of the first goal. Obviously, the penetration
rate of the cleaner fuels increased so that, in the last year, they
earned 21% share totally. In the same way, the reduction trend for
fossil fuels could be observed here in the current scenario with
relatively higher intensity, which was reasonable due to the greater
importance of CO2 emission minimization.
B) Cost scenario was defined in which both of the second (fuel
cost) and third (implementation cost) goals were given 40% of the
weight, and the other goals were weighted 4% each. In this scenario,
the MF values of the goals did not change significantly. Similarly,
CNG was still dominant, and gradual reduction of the fossil fuels’
share was obvious in all years. Also, in 2025, the hybrid technology
was the winner among the cleaner alternatives with 6% of share,
and the total share of new fuels and the hybrid technology was 11%.
Fig. 9 presents the fuel portfolio variation of the Cost scenario in 4-
year intervals.
The effect of the weight variation of other goals was assessed
generally, and no significant change was recognized in the fuel
portfolio diversity. The observed results are as following:
 Giving more importance to each goal increased its MF value.
 Growth in new fuels and the hybrid technology was followed by
increase in CO2 emission reduction, social acceptance and fuel
smuggling reduction MF values, and had a reverse impact on
implementation cost reduction and price stability.
 CNG and gasoline had the greatest shares in the portfolio.
 Gradual reduction of fossil fuels was seen.
 Increase in cleaner fuels with the leading role of hybrid tech-
nology was seen.
Biodiesel, Hybrid,
2.8% 3.7%
E85, 1.9%
LPG, 7.4% Gasoline,
34.4%
Diesel, 5.3%
CNG, 44.6%
2021
Gasoline,
31.9%
Diesel, 4.6%
4.1.2. Sensitivity analysis of aspiration levels
In order to check the sensitivity of results to ALs, the effect of
variation of this parameter was studied. By increase of the ALs of
the goals to be minimized, the goals' MFs were also increased and
fossil fuels, especially CNG, gasoline and LPG earned more shares in
the portfolio. As an instance, when the AL of the first goal (CO2
emission) was raised to the highest emission (gasoline with 23.08
kgCO2 eq/100 km), the shares of CNG and gasoline were approxi-
mately raised by 4% and 5%, respectively. Lowering the ALs of these
goals led to reduction in their MFs and the shares of fossil fuels;
however, targeting the lowest amounts of existing scores in Table 1
was not followed by a feasible optimal solution. The reverse situ-
ation was going on for the goals, to be maximized while their in-
fluences were more limited. Fig. 10 shows the flow of the ALs’
sensitivity analysis.
Due to the greater effects on both MFs and fuels diversity, it can
be concluded that the aspiration and tolerance levels play more
sensitive parts in the model. Obviously targeting strict levels for
goals requires strong alternatives in the model to be followed by
the feasible optimal solution, which may not accord with the real
conditions. On the other hand, considering the loose targets surely
affects the level of optimization, and consequently, effectiveness of
the model. In this regard, the realistic levels of goals should be
reorganized to have the model appropriately employed. Evidently,
both sides of sensitivity analysis confirmed the proper level of the
obtained results’ stability though some limitations did exist. For
instance, having a large range, available data in cost-related ob-
jectives were difficult to integrate, an issue that invited many dis-
agreements. Moreover, combining non-monetary data with
 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319
Biodiesel,
Hybrid, 2%
4%
E85, 2%
Gasoline,
28%
LPG, 8%
Diesel, 6%
CNG, 50%
2017
Hybrid, 10%
Biodiesel,
6%
E85, 5%
LPG, 7%
CNG, 39%
2025
Fig. 8. Fuel portfolio variation of environmental scenario in 4-year intervals.
financial matters with high level of uncertainty was controversial;
however, this issue could be vastly improved by applying fuzzy
parameters as well as fuzzy goals. On the other hand, lack of defi-
nite fuel pricing policy in Iran made the process of future price
estimation more complicated. Fortunately, the current model was
flexible enough to accommodate changes in fuel costs and future
developments in technology maturity.
4.2. Optimal fuel portfolio in the absence of constraints
In order to investigate the effect of constraints in the optimal
portfolio layout, the model was solved neglecting the priority and
systematic constraints. The overall situation in the values of MFs
was very close to the base scenario; however, some differences
could be observed such as a 5% and 11% decrease in the possibility
of CO2 emission reduction and avoiding of fuel smuggling, respec-
tively. As it can be seen in Fig. 11, the total share of both CNG and
gasoline was more than 80% in all years. In the first years of the
period, diesel's share was about 11%, whereas in the ending years,
the share was getting close to 0. Interestingly, while the LPG never
entered to the portfolio, E85 and biodiesel played a greater role in
the portfolio so that in 2025, close to 13% of the portfolio was
earned by E85. On the other hand, despite the fact that the hybrid
technology was more prone to get popular in the mid-term, only
0.2% of the portfolio was occupied by this technology in 2025.
Inspection of the optimization model in the absence of the
priority and systematic constraints revealed that although the
portfolio of fuels was optimal based on the considering goals,
serious questions could be raised about the feasibility of
313
Biodiesel, Hybrid, 8%
6%
Gasoline,
29%
E85, 5%
LPG, 7%
Diesel, 6%
CNG, 39%
2021
Gasoline,
28%
Diesel, 5%
implementation, especially in last years of the horizon. Drastic
changes in the fuels’ shares in short time intervals, lack of regard to
the infrastructures and more suitable alternative fuels were
obvious in the results. Hence, applying the priority of fuels, which
were ranked, considering the local conditions as well as the inev-
itable limitation imposed by the current situation of the system
would lead to more convergence between the optimality and
feasibility of this portfolio implementation.
4.3. Optimal fuel portfolio and future fuel demand
Developing a realistic optimum fuel portfolio requires adequate
knowledge of the past and the present energy consumption and
presumably the future demands. As it is clear, estimation of the
requirement volume of fuels could benefit the process of fuel
supply planning, which would ultimately, moderate the risks
associated with supply security.
Many surveys have been carried out focusing on forecasting
both the total and the transportation energy demand of Iran using
either regular or metaheuristic approaches. Since a significant
accordance could be seen in the results of researches, most valid
works with convergence in findings were used in the present work
to extract the data for the transportation energy demand in the
horizon of 2025 (E and J, 2011; Forouzanfar et al., 2012; Kazemi
et al., 2010; Sahraei and Yavari, 2014). According to the statistics,
58e60% of the energy demand of the transportation sector is
related to LDVs (IFCO, 2012; NIORDC, 2014). Due to the fact that the
growth in number of LDVs and thus their energy consumption are
considered to estimate the transportation energy demand, the
314 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319

Biodiesel, Biodiesel,
0% Hybrid, 0% 3% Hybrid, 4%
E85, 0% E85, 2%
LPG, 8% LPG, 8%
Gasoline,
Gasoline, 35%
40%

CNG, 47%

Diesel, 5%
Diesel, 5%
CNG, 43%
2017 2021

Hybrid, 6%
Biodiesel,
3%

E85, 2% Gasoline,
LPG, 7% 35%

Diesel, 4%
CNG, 43%

2025
Fig. 9. Fuel portfolio variation of cost scenario in 4-year intervals.

Increase in the MFs of

minimized goals

Increase in fossil fuels’

Increase in ALs share, especially CNG
and gasoline

Decrease in the MFs of

maximized goals

Decrease in the MFs

of minimized goals
Increase in cleaner fuels
Decrease in ALs and technology,
especially biodiesel
and hybrid

Increase in the MFs of

maximized goals

Fig. 10. Sensitivity analysis of ALs.

 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319 315

Biodiesel,
Biodiesel,
3%
1% Hybrid, 0% E85, 7% Hybrid, 0%
E85, 1%
LPG, 0%
LPG, 0% Gasoline,
Gasoline,
32%
34%

CNG, 53%
Diesel, 5%

Diesel, 11% CNG, 53%

2017 2021

Biodiesel, Hybrid, 0%
6%
E85, 13% Gasoline,
30%
LPG, 0%

Diesel, 0%

CNG, 51%
2025
Fig. 11. Fuel portfolio variation in the absence of constraints.

annual energy demand of LDVs was extracted from the total energy Table 5
demand of the sector based on MBOE. Table 5 represents the de- Estimated energy demand of Iran transportation sector (MBOEs).
mand data for 2017e2015. Years Transportation energy demand LDV energy demand
The variation of the optimum fuel diversity based on BOE in
2017 426.7 256.0
years 2017e2025 is presented in Fig. 12. Despite the descending 2018 444.9 266.9
rate of fossil fuels in the portfolio, the growing trend of demand in 2019 463.7 278.2
the transportation sector decreased the intensity of reduction rates. 2020 483.3 290.0
2021 503.6 302.2
As it can be noticed, the amounts of CNG and gasoline had an
2022 524.6 314.8
increasing trend while LPG and diesel amounts did not change 2023 546.4 327.8
significantly. Biodiesel, hybrid technology and E85 also had a 2024 568.9 341.3
growing trend. According to the chart, in 2023, the rate of fossil 2025 592.4 355.4
fuels’ reduction was intensified. Besides, hybrid technology and
biodiesel surpassed the diesel for the first time in this year.
considerable amount (18%) of reduction. Comparison of the current
and optimal portfolios is presented in Table 6. Fig. 13 shows the
4.4. Observation of optimum portfolios and related possible policies
development in the reduction of CO2 emissions of optimal fuel
portfolios. A drastic drop in the fuels' cost in the optimal portfolio of
Obviously, fossil fuels are the dominant family of fuels in the
2017 could be observed, which was mainly owing to the substitu-
transportation sector of Iran. Although this dominance seems not
tion of large portion of gasoline by CNG. Implementation of cleaner
possible to be removed in near future, the modification and
and thus expensive fuels in the last years of the horizon raised the
diversification of the fuel portfolio could soothe the destructive
fuels' cost; however, regarding the current portfolio fuels' cost, in
effects of this absolute hegemony. As mentioned earlier, utilizing of
the optimal situation, an 18% reduction was still achievable. More
cleaner fossil fuels such as CNG and LPG, which have also earned a
importantly, the CO2 emission reduction was stable, and increased
significant share in the optimum portfolio along with introducing
with a reasonable rate of 0.4% per year. It is to be noted that the
new fuels and technology including biodiesel, ethanol and hybrid
change in optimal portfolios was calculated based on the current
cars, could help avert the economic and environmental catastro-
portfolio. Moreover, the fuels’ costs in the future years were dis-
phes. Given the results of the current study, achieving the optimal
counted by an annual interest rate of 10% to get comparable with
portfolio in 2025 would decrease the CO2 emission by around 11%
the current costs.
while the present value of the fuels' cost in this portfolio showed a
316 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319

160

140

120

100
BOE

80

60

40

20

0
2017 2018 2019 2020 2021 2022 2023 2024 2025
Year
Gasoline Diesel CNG LPG E85 Biodiesel Hybrid
Fig. 12. Variation of optimum fuel diversity based on fuel demand.

Table 6
Comparison of current and optimum portfolios.

Portfolio Characteristics Current portfolio Optimum portfolio (2017) Change (%) Optimum portfolio (2021) Change (%) Optimum portfolio (2025) Change (%)

Gasoline share (%) 65 36.3 28.7 34.4 30.6 31.9 33.1

Diesel share (%) 9 5.9 3.1 5.3 4 4.6 4.4
CNG share (%) 22 49.1 27.1 44.6 22.6 43.2 21.2
LPG share (%) 4 7.9 3.9 7.4 3.4 6.8 2.8
E85 share (%) 0 0.3 0.3 1.9 1.9 2.3 2.3
Biodiesel share (%) 0 0.5 0.5 2.8 2.8 4.4 4.4
Hybrid share (%) 0 0 0 3.7 3.8 6.8 6.8
CO2 emission (kgCO2 eq/100 km) 21.2 19.6 7 19.2 9 18.93 10.7
Fuel cost ($/100 km) 1.54 0.98 44 1.14 26 1.24 18

Comparison of the results of some related studies reveals their
meaningful accordance with the outcome of the current research.
For instance, in a research done by Rassafi et al. (2006), different
scenarios for utilizing alternative fuels by Iranian passenger cars
were evaluated and a strategy was proposed in which 30e40%
gasoline, 50e60% CNG and 10% hydrogen were recommended. In
another study, Sehatpour et al. (2017) presented that CNG and LPG
are the most suitable alternative fuels for LDVs in Iran in a mid-term
horizon that can substitute a significant share of gasoline in fuel
portfolio. Moreover, Sadeghi and Mirshojaeian Hosseini (2008)
proposed a scenario wherein substitution of urban railroad tech-
nologies, all passenger CNG technologies, and rural railroad freight
technologies, as well as CNG and LNG heavy and light trucks with
current passenger and freight vehicle technologies was suggested.
They also concluded that this scenario will decline the consumption
of gasoline and diesel (by 24% and 17%, respectively) and decrease
the total fuel consumption by about 14%.
Despite the progress in providing substrate for the greater uti-
lization of CNG in Iran, construction of LPG stations has been
considerably slowed down in the recent years, while the number of
current stations is not significant; as a result, the share of this
beneficial fuel has declined drastically by about 18.5% during
2001e2014 (Mohammadzadeh et al., 2014). In order to retrieve the
LPG share in the fuel portfolio, the government is recommended to
support the policies such as mitigating the prices of lands with
servicing functionality and granting facilities to purchase land,
especially in the big cities like Tehran. Besides, constructing LPG
stations in the regions and cities close to the refineries would be
much less costly and a proper policy to cultivate the field of
popularizing this fuel. Along with contentious subsidy reform plan,
a consistent liberated fuel pricing strategy is required to dump the
economic shocks and improving the energy consumption pattern.
On the other hand, the development of new technologies and fuels
such as hybrid technology, biodiesel, and ethanol to diversify the
fuel portfolio and reduce the challenges in the transportation sector
seems to be indispensable (Sehatpour et al., 2017).
In addition to the prevalence and cost matters of fossil fuels,
serious challenges like lack of infrastructure, capital, and knowl-
edge about renewable energy potential, insufficient social and
environmental policies and programs to encourage their imple-
mentation, deficiency of training and social acceptance and
awareness, and more importantly, absence of proper planning in
the agriculture sector in order to produce biofuels should be
addressed and tackled in the way of renewable energy imple-
mentation (Hosseini et al., 2013).
Finally, supporting the private sector for dissemination of
renewable energy applications, manufacturers for transferring and
localization of related technologies, which are expected to become
viable in medium terms, and the research centers to grow the
research programs in the field can be followed as main policies for
 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319
20.0
19.5
19.0
CO2 emission (kgCO2 eq/100km)
18.5
18.0
17.5
17.0
16.5
16.0
15.5
15.0
2017
renewable energy development in Iran (Afsharzade et al., 2016).
5. Conclusion and recommendations
The total global energy demand has almost doubled since 1980,
and studies have estimated that transportation sector consumes
approximately 20% of the global energy (IEA, 2015). As a matter of
fact, involving economic, social and policy-related aspects, in
addition to the environmental concerns, will provide a more ho-
listic structure to help the sustainability of future transportation
systems. Evidently, diversification and optimization of trans-
portation fuel portfolio would lead to more economic savings,
environmental sustainability, supply security, mitigating global
warming, and reducing energy consumption. This study was
accomplished following the below objectives:
 It explored the suitability of different fuels and technologies
including conventional and new cleaner fuels for LDVs, and
designated the controlled levels of the first presence of new
fuels in Iran's transportation fuel portfolio. Six different fuels
consisting of gasoline, diesel, CNG, LPG, E85 and biodiesel and
one gasoline-electric hybrid technology were evaluated using
the SIR method. The results revealed that CNG, gasoline and LPG
are the three highly ranked fuels in the intended horizon, and
the hybrid technology's rank has improved in the last years.
 By developing a fuzzy approach in optimization of trans-
portation fuel portfolio, a practical decision-making platform for
policy-makers was provided that simultaneously integrates the
fundamental and controversial concerns. In this way, an inte-
grated fuzzy MCDM approach was considered for fuel portfolio
optimization of LDVs, while seven concerns including CO2
emission, fuel cost, implementation cost, energy security, social
acceptance, fuel price stability and fuel smuggling were taken
into account. Then, after evaluation of the fuel alternatives, the
optimum share of each fuel during 2017e2025 was estimated
through a fuzzy multi-objective programming. Employing dy-
namic data, the model led to the conclusion that while the
possibilities of achieving goals are quite acceptable, the CO2
emission and cost of the optimum fuel portfolio could be miti-
gated by 11% and 18%, respectively in 2025. Moreover, the re-
sults revealed that in an optimum portfolio, the share of CNG
317
2018 2019 2020 2021 2022 2023 2024 2025
Years
Fig. 13. CO2 emission of optimal portfolios.
and LPG should be increased; however, in general, the share of
fossil fuels was declined by a slight rate as time passed so that
these two fuels were partly substituted by E85, biodiesel and
gasoline-electric hybrid.
 The optimal portfolios in the presence of future demand were
investigated aiming to illustrate the upcoming path, and
consequently, moderate the risks associated with supply secu-
rity. It was found that although the rate of fossil fuels' share was
descending in the optimal portfolios, the growing trend of de-
mand in the transportation sector decreased the intensity of
reduction rates such that CNG and gasoline had an increasing
trend and LPG and diesel amounts did not change significantly.
Biodiesel, hybrid technology and E85 also had a growing trend.
Given the current situation, meeting the need for cleaner fuels
requires more investment in the infrastructures, research areas,
biofuels and localization of new technologies.
To test the stability of the results and sensitivity of the weights,
two scenarios (namely environmental and cost-related) with the
selection of different weight factors per goal were presented
wherein no significant variation from the base scenario was seen. In
addition, the model's sensitivity to ALs was checked, and the sta-
bility of the model was seen though the model seemed to be more
sensitive to the variation of this parameter.
To sum up, this study proposed a model for optimization of LDVs
fuel portfolio, linking different aspects and concerns. The results of
the current study could provide the decision-makers with an
insight to consider them as the roadmap for alternation in fuel
portfolio in a mid-term horizon; however, room for improvements
does exist as follows:
1. The results of decision-making models may be affected by
choosing different techniques. For future research, the problem
can be formulated by other MCDM techniques for comparisons
of the results.
2. This study employed linguistic data to deal with the large range
of available data, especially in cost-related goals. To present a
more specified result, it is recommended that future studies can
be done by defining more detailed subcategories for such goals
to utilize numerical data with less complexity of interpretation.
318 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319
3. To raise the applicability of the results, local constraints and
circumstances have been considered in the model of this paper,
especially in defining the targets, estimation of the future prices
and the minimum percentage of some fuels. Future researchers
may focus on the case with global standards and more alter-
natives in the portfolio to address the research gaps in the
related field.
Acknowledgements
This research was supported by Iranian Fuel Conservation
Company (IFCO).
Appendix A. Goals
A.1.CO2 emission
Road passenger transportation is in charge of a large and
increasing share of the total emissions of CO2 and an even larger
share of oil consumption. In 2010, the transportation contributed
by as much as 22% to the global CO2 emissions, and it is projected to
double by 2050, reaching 14e18 gigatonnes (Gt) of CO2 (Marchal
et al., 2011). In this regard, it is consistently expected that further
substantial efforts to be made to decrease the transportation en-
ergy consumption and emission as the fundamental challenges
need to be tackled to limit the global warming (Van Dender, 2009).
A.2.Fuel cost
This parameter is calculated as fuel cost per 100 km distance
traveled (dollar/100 km) related to the fuel economy of each vehicle
(liters/100 km) and the cost of fuel (dollar/liter). Fuel economy of a
vehicle implies the fuel's efficiency relationship between the dis-
tance traveled and the amount of fuel consumed by the vehicle. In
order to simulate actual driving circumstances, in this study, the
fuel economies for the vehicles were combined considering 55%
city driving and 45% highway driving. This assumption and the fuel
economies of vehicles were taken from Iran's fuel consumption
guide for LDVs provided by IFCO and consulting with the experts
from this organization (IFCO, 2012).
A.3.Implementation cost
Implementation cost refers to both the acquisition of a vehicle
powered by each of the considered fuels and the associated infra-
structure costs (Tsita and Pilavachi, 2012). Because of the deficiency
of the initial economics of scale, the initial costs to expand the
market of new fuels’ infrastructure are commonly high in com-
parison with the petroleum-based fuels. Furthermore, to bridge the
investment gaps, the public support is highly required for the
market introduction of new transport fuels (Barrett, 2011). There-
fore, the investment and transitions in the alternative fuel infra-
structure may need to be encouraged or mandated by countries in
order to drive the market forward.
A.4.Energy security
Supply security is an important goal of energy policy in many
countries around the world. In the existing literature, it is most
commonly defined as the reliable supply of energy at reasonable
prices to support the economy and industry (Vivoda, 2010).
Evidently, the dependency on fuel imports exposes the macro-
economy to destructive price shocks and puts a long-term strain
on the household budgets, leading to not being able to handle the
rising costs and price instability. This dependency can be decreased
by using alternative fuels based on local raw materials (Tsita and
Pilavachi, 2012). Today, the concept of energy security is closely
entangled with other energy policy problems such as providing
equitable access to modern energy and mitigating climate changes
(Cherp and Jewell, 2014).
A.5.Social acceptance
Inputs such as expert opinions, public outlooks and perceptions
are involved in the planning and decision-making process in
democratic societies (Stigka et al., 2014). Evidently, an important
means to reduce the reliance of economies on fossil fuels and to
reach the international goals of CO2 emission reduction is to adopt
cleaner energy and more efficient technologies (Koetse and Hoen,
2014). Having lower social costs, the green energy sources are
more expensive, a fact that prevents them from becoming more
prevalent; however, true social externalities are not reflected by the
conventional fuels’ costs. A key factor primarily established through
the public trust and support for a considerable expansion of bio-
energy is the social acceptance that requires a policy outline for
efficient and interactive communication between stakeholders.
Accordingly, a significant instrument to build this basis is the
publication and propagation of the best practice instances
(Mavrovouniotou, 2015).
A.6.Price stability
From an economic standpoint, stability of fuel prices has a very
high importance, such that it is considered more important than
the fuel prices itself (Bernard and Santini, 1989). Frequent changes
in pricing points would cause ambiguity in calculation of the end
users’ business costs; this could lead to less popularity or hindering
the diffusion of the fuel (Albrecht, 2007; Dooley, 1998). Although
dropping a fuel price seems to be desirable for consumers, after
considering the opportunity cost, the price stability proves itself as
the best interest for both sides of the market.
A.7.Fuel smuggling
Fossil fuel subsidies for consumers as a means of achieving
certain social, economic and environmental objectives have been
used by the developing countries’ governments (Bazilian and
Onyeji, 2012). Principally, considerable subsidies on fossil fuels
have caused a large fuel price disparity between Iran and her
neighbors like Turkey, Pakistan and Afghanistan, which is one of
the important factors underlying the expansion of fuel smuggling
from Iran. Due to the subsidies on fuel products and the resem-
blance between the transportation navigation of Iran and her
neighbors, around 90% of the export smuggling in Iran comprises
the oil-related products, especially fossil fuels. After a significant
rise in the foreign exchange rate, the fuel smuggling, which had
been controlled by the subsidy reform plan, has become attractive
again (Farzanegan, 2009). As for the solutions to the problem, the
removal of fossil fuel subsidies and diversification of the trans-
portation fuel portfolio by means of new and clean fuels will lead to
favorable results, ranging from market distortion up to the impact
on climate change and clean energy development (Bazilian and
Onyeji, 2012).
References
Achour, Houda, Belloumi, Mounir, 2016. Investigating the causal relationship be-
tween transport infrastructure, transport energy consumption and economic
growth in Tunisia. Renew. Sustain. Energy Rev. 56, 988e998. https://doi.org/
10.1016/j.rser.2015.12.023.
Adnan, Nadia, Nordin, Shahrina Mohammad, Rahman, Imran, Amini, Mohammad
 M.-H. Sehatpour, A. Kazemi / Journal of Cleaner Production 176 (2018) 304e319
Hadi, 2017. A market modeling review study on predicting Malaysian consumer
behavior towards widespread adoption of PHEV/EV. Environ. Sci. Pollut. Res. 24
(22), 17955e17975. https://doi.org/10.1007/s11356-017-9153-8.
Afsharzade, Nashmil, Papzan, Abdolhamid, Ashjaee, Mehdi, Delangizan, Sohrab, Van
Passel, Steven, Azadi, Hossein, 2016. Renewable energy development in rural
areas of Iran. Renew. Sustain. Energy Rev. 65, 743e755. https://doi.org/10.1016/
j.rser.2016.07.042.
Albrecht, Johan, 2007. The future role of photovoltaics: a learning curve versus
portfolio perspective. Energy Pol. 35 (4), 2296e2304. https://doi.org/10.1016/
j.enpol.2006.07.013.
Barrett, Steve, 2011. European Expert Group reports on future transport fuels. Fuel
Cell. Bull. 2011 (2), 12e16.
Bazilian, Morgan, Onyeji, Ijeoma, 2012. Fossil fuel subsidy removal and inadequate
public power supply: implications for businesses. Energy Pol. 45, 1e5. https://
doi.org/10.1016/j.enpol.2012.02.057.
Behboodi, Sahand, Chassin, David P., Crawford, Curran, Djilali, Ned, 2016. Renewable
resources portfolio optimization in the presence of demand response. Appl.
Energy 162, 139e148. https://doi.org/10.1016/j.apenergy.2015.10.074.
Bernard, Martin J., Santini, Danilo J., 1989. Enhancing energy price stability through
consistent and balanced energy technology R&D. Energy Pol. 17 (6), 554e566.
https://doi.org/10.1016/0301-4215(89)90135-3.
Brans, J.P., Vincke, Ph, Mareschal, B., 1986. How to select and how to rank projects:
the Promethee method. Eur. J. Oper. Res. 24 (2), 228e238. https://doi.org/
10.1016/0377-2217(86)90044-5.
Cherp, Aleh, Jewell, Jessica, 2014. The concept of energy security: beyond the four
as. Energy Pol. 75, 415e421. https://doi.org/10.1016/j.enpol.2014.09.005.
Chiandussi, G., Codegone, M., Ferrero, S., Varesio, F.E., 2012. Comparison of multi-
objective optimization methodologies for engineering applications. Comput.
Math. Appl. 63 (5), 912e942. https://doi.org/10.1016/j.camwa.2011.11.057.
Daim, Tugrul, Cowan, Kelly, 2010. Assessing renewable energy portfolio futures
with multiple perspectives: the case of the northwest US. Technol. Soc. 32 (4),
255e263. https://doi.org/10.1016/j.techsoc.2010.10.001.
Daim, Tugrul, Kayakutlu, Gulgun, Cowan, Kelly, 2010a. Developing Oregon's
renewable energy portfolio using fuzzy goal programming model. Comput. Ind.
Eng. 59 (4), 786e793. https://doi.org/10.1016/j.cie.2010.08.004.
Daim, Tugrul, Schweinfort, Willy, Kayakutlu, Gulgun, Third, Noah, 2010b. Identifi-
cation of energy policy priorities from existing energy portfolios using hierar-
chical decision model and goal programming: case of Germany and France. Int.
J. Energy Sect. Manag. 4 (1), 24e43. https://doi.org/10.1108/
17506221011033080.
Dooley, J.J., 1998. Unintended consequences: energy R&D in a deregulated energy
market. Energy Pol. 26 (7), 547e555. https://doi.org/10.1016/S0301-4215(97)
00166-3.
E, M., J, M.A.M., 2011. Energy demand forcast (1404): Iran transportation section,
using ARIMA model. Sci. J. Med. Sci. 2e27 (3), 67e72.
Farzanegan, Mohammad Reza, 2009. Illegal trade in the Iranian economy: evidence
from a structural model. Eur. J. Polit. Econ. 25 (4), 489e507. https://doi.org/
10.1016/j.ejpoleco.2009.02.008.
Forouzanfar, Mehdi, Doustmohammadi, A., Hasanzadeh, Samira, 2012. Transport
energy demand forecast using multi-level genetic programming. Appl. Energy
91 (1), 496e503.
Gao, Cuixia, Sun, Mei, Shen, Bo, Li, Ranran, Tian, Lixin, 2014. Optimization of China's
energy structure based on portfolio theory. Energy 77, 890e897. https://doi.org/
10.1016/j.energy.2014.09.075.
Hosseini, Seyed Ehsan, Andwari, Amin Mahmoudzadeh, Wahid, Mazlan Abdul,
Bagheri, Ghobad, 2013. A review on green energy potentials in Iran. Renew.
Sustain. Energy Rev. 27, 533e545. https://doi.org/10.1016/j.rser.2013.07.015.
IEA, 2015. Energy Technology Perspectives 2015. OECD Publishing.
IFCO, 2012. Iran's Fuel Consumption Guide for LDVs. Transportation sector: Iranian
Fuel Conservation Organization (IFCO).
Kazemi, Aliyeh, Shakouri, Hamed G., Menhaj, M. Bagher, Mehregan, M. Reza,
Neshat, Najmeh, 2010. A hierarchical artificial neural network for transport
energy demand forecast: Iran case study. Neural Netw. World 20 (6), 761.
Koetse, Mark J., Hoen, Anco, 2014. Preferences for alternative fuel vehicles of
company car drivers. Resour. Energy Econ. 37, 279e301. https://doi.org/10.1016/
j.reseneeco.2013.12.006.
Marchal, Virginie, Dellink, Rob, Van Vuuren, Detlef, Clapp, Christa, Chateau, Jean,
Magne , B., van Vliet, J., 2011. OECD Environmental Outlook to 2050. Organiza-
tion for Economic Co-operation and Development.
Mavrovouniotou, Styliani-Maria, 2015. Social Acceptance of Biomass Projects
(Master's Thesis). International Hellenic University, Greece. Retrieved from.
https://repository.ihu.edu.gr//xmlui/handle/11544/408.
Mitchell, G., 2015. Modified Approach Multi-criteria Decision Making Using Goal
Programming to Evaluate Renewable Energy Alternatives. University of Ohio.
MOE, 2014. Energy Balance Annual Report. Ministry of energy, Tehran, Iran.
Mohammadzadeh, Samiyeh, Garmeh, Abdolhossein Ghazavi,
Mohammadzadeh, Sepideh, 2014. Costebenefit analysis of constructing sin-
gleePurpose CNG stations in Iran by emphasizing on different scenarios. The
Open Access Journal of Resistive Economics (OAJRE) 92.
Mozafar, Mostafa Rezaei, Moradi, Mohammad H., Amini, M. Hadi, 2017.
A simultaneous approach for optimal allocation of renewable energy sources
and electric vehicle charging stations in smart grids based on improved GA-PSO
319
algorithm. Sustainable Cities and Society 32, 627e637. https://doi.org/10.1016/
j.scs.2017.05.007.
NIORDC, 2014. Consumption Statistics and Information. National Iranian Oil
Refining and Distribution Company.
Onat, Nuri Cihat, Kucukvar, Murat, Tatari, Omer, Zheng, Qipeng Phil, 2016. Com-
bined application of multi-criteria optimization and life-cycle sustainability
assessment for optimal distribution of alternative passenger cars in U.S. J. Clean.
Prod. 112 (Part 1), 291e307. https://doi.org/10.1016/j.jclepro.2015.09.021.
Rassafi, A.A., Vaziri, M., Azadani, A.N., 2006. Strategies for utilizing alternative fuels
by Iranian passenger cars. Int. J. Environ. Sci. Technol. 3 (1), 59e68.
Ren, Hongbo, Gao, Weijun, Zhou, Weisheng, Nakagami, Ken’ichi, 2009. Multi-
criteria evaluation for the optimal adoption of distributed residential energy
systems in Japan. Energy Pol. 37 (12), 5484e5493. https://doi.org/10.1016/
j.enpol.2009.08.014.
Romejko, Kamila, Nakano, Masaru, 2016. Portfolio analysis of alternative fuel ve-
hicles considering technological advancement, energy security and policy.
J. Clean. Prod. 142 (part 1), 39e49. https://doi.org/10.1016/j.jclepro.2016.09.029.
Sadeghi, Mehdi, Mirshojaeian Hosseini, Hossein, 2008. Integrated energy planning
for transportation sectorda case study for Iran with techno-economic
approach. Energy Pol. 36 (2), 850e866. https://doi.org/10.1016/
j.enpol.2007.10.020.
Sadeghinezhad, E., Kazi, S.N., Sadeghinejad, Foad, Badarudin, A.,
Mehrali, Mohammad, Sadri, Rad, Mohammad, Reza Safaei, 2014.
A comprehensive literature review of bio-fuel performance in internal com-
bustion engine and relevant costs involvement. Renew. Sustain. Energy Rev. 30,
29e44. https://doi.org/10.1016/j.rser.2013.09.022.
Safaei Mohamadabadi, H., Tichkowsky, G., Kumar, A., 2009. Development of a multi-
criteria assessment model for ranking of renewable and non-renewable
transportation fuel vehicles. Energy 34 (1), 112e125. https://doi.org/10.1016/
j.energy.2008.09.004.
Sahraei, Razieh, Yavari, Masumeh, 2014. Estimation of energy demand function in
Iran road transportation sector, 1978-2013. Sci. J. Med. Sci. 2 (7), 23e42.
Salvi, B.L., Subramanian, K.A., Panwar, N.L., 2013. Alternative fuels for transportation
vehicles: a technical review. Renew. Sustain. Energy Rev. 25, 404e419. https://
doi.org/10.1016/j.rser.2013.04.017.
San Cristo bal, Jose
 Ramon, 2012. Multi Criteria Analysis in the Renewable Energy
Industry. Springer Science & Business Media.
Sehatpour, Mohammad-Hadi, Kazemi, Aliyeh, Sehatpour, Hesam-eddin, 2017.
Evaluation of alternative fuels for light-duty vehicles in Iran using a multi-
criteria approach. Renew. Sustain. Energy Rev. 72, 295e310. https://doi.org/
10.1016/j.rser.2017.01.067.
Shafie-Pour, M., Ardestani, M., Sarraf, M., 2007. Fuels Price Structuring; a Tool for
Integration of Environmental Concerns into Energy Sector.
Sieminski, Adam, 2014. International Energy Outlook. Energy Information Admin-
istration (EIA).
Statistics, IEA, 2015. CO2 emissions from Fuel Combustion-highlights. IEA, Paris.
Stigka, Eleni K., Paravantis, John A., Mihalakakou, Giouli K., 2014. Social acceptance
of renewable energy sources: a review of contingent valuation applications.
Renew. Sustain. Energy Rev. 32, 100e106. https://doi.org/10.1016/
j.rser.2013.12.026.
Talaei, Mohammad, Moghaddam, Farhang Babak, Pishvaee, Mir Saman, Bozorgi-
Amiri, Ali, Gholamnejad, Sepideh, 2016. A robust fuzzy optimization model for
carbon-efficient closed-loop supply chain network design problem: a numerical
illustration in electronics industry. J. Clean. Prod. 113, 662e673. https://doi.org/
10.1016/j.jclepro.2015.10.074.
Tam, C.M., Thomas, K.L., Zhang, Hong, 2007. Decision Making and Operations
Research Techniques for Construction Management. City University of HK Press.
Tiwari, R.N., Dharmar, S., Rao, J.R., 1987. Fuzzy goal programming d an additive
model. Fuzzy Set Syst. 24 (1), 27e34. https://doi.org/10.1016/0165-0114(87)
90111-4.
Tsita, Katerina G., Pilavachi, Petros A., 2012. Evaluation of alternative fuels for the
Greek road transport sector using the analytic hierarchy process. Energy Pol. 48,
677e686. https://doi.org/10.1016/j.enpol.2012.05.079.
Tzeng, Gwo-Hshiung, Shiau, Tzay-An, Teng, Junn-Yuan, 1994. Multiobjective
decision-making approach to energy supply mix decisions in taiwan. Energy
Sources 16 (3), 301e316. https://doi.org/10.1080/00908319408909080.
Van Dender, Kurt, 2009. Energy policy in transport and transport policy. Energy Pol.
37 (10), 3854e3862.
Vivoda, Vlado, 2010. Evaluating energy security in the Asia-Pacific region: a novel
methodological approach. Energy Pol. 38 (9), 5258e5263. https://doi.org/
10.1016/j.enpol.2010.05.028.
Xu, Xiaozhan, 2001. The SIR method: a superiority and inferiority ranking method
for multiple criteria decision making. Eur. J. Oper. Res. 131 (3), 587e602. https://
doi.org/10.1016/S0377-2217(00)00101-6.
Yılmaz Balaman, Şebnem, Selim, Hasan, 2016. Sustainable design of renewable
energy supply chains integrated with district heating systems: a fuzzy opti-
mization approach. J. Clean. Prod. 133, 863e885. https://doi.org/10.1016/
j.jclepro.2016.06.001.
Zeng, Ziqiang, Nasri, Ehsan, Chini, Abdol, Ries, Robert, Xu, Jiuping, 2015. A multiple
objective decision making model for energy generation portfolio under fuzzy
uncertainty: case study of large scale investor-owned utilities in Florida. Renew.
Energy 75, 224e242. https://doi.org/10.1016/j.renene.2014.09.030.