Abstract: In the last few decades, biodiesel has been introduced as an environmentally friendly fuel derived from a practically inexhaustible raw material (biomass) and can be considered as an analogue of traditional energy carriers. It has a number of advantages over fossil fuels, but high production costs are one of the main difficulties that hinder its economic feasibility. An approach to integrating sustainability into a supply chain for biodiesel obtained from waste generated in the dairy industry was developed. The designing an effective supply chain in order to minimize the overall operating costs and to provide the optimal scenario for reducing the environmental impact of the whole supply chain was explored. In the present study the feature of the considered supply chain was outlined and the wastes generated by the dairy industry as raw material for biodiesel production were characterized. A mathematical model of mixed integer linear programming (MILP) with an optimization criterion defined in terms of economic sustainability was proposed. Environmental assessment data were implemented as part of it. The optimal compromise between economic and environmental problems was intended.