The purpose of the article is to determine the strategy of development and effective principles of regulation of biofuels production in Ukraine at the competitive level.?To systematize historical trends in the development of world and domestic energy, a dialectical method has been used. Using the monographic method, the priority principles of formation and mechanisms of regulation of energy policy and biofuels production are investigated. The forecasting method is used to formulate conceptual foundations of regulation and strategy for the development of competitive production of biofuels, and abstract-logical – for the theoretical generalization and formulation of conclusions. To ensure a solution to raised the problem, the well-known strategic planning tool – SWOT-analysis was used.?Based on the SWOT-analysis and the results of the study, a comprehensive mechanism for increasing the rate of industrial production of biofuels in Ukraine at a competitive level has been formed, containing the following priority regulatory measures: technology transfer and innovation; harmonization of the legal framework with the European Union; introduction of energy-saving and energy-efficient technologies; proper consulting and audit; attraction of highly skilled personnel; cluster approaches; provision of principles of nature conservation; development of foreign economic activity in the biofuels industry. The state regulatory strategy for the development of competitive biofuels production involves the comprehensive application of economic, legal and administrative regulatory methods.