I’m not sure if this is the correct place to post this, but here goes:
As things stand, the biofuels subsidies policy reduces oil demand, and makes environmentalists, motorists and farmers happy. That farmers are happy about such a policy is undoubtedly correct, and motorists might be too, but the rest of the effects are somewhat questionable. Environmentalists don’t like them too much, and given that modern mechanised agriculture consumes a lot of fossil fuels (not just to power the machinery - natural gas goes into the fertiliser… a lot of natural gas), it is not obvious that biofuels significantly reduce fossil fuel demand (AFAIK, it has yet to be seen whether it is possible to connect the input to the output on the corn ethanol process and get a net energy output).
Finally, it should be noted that socialists aren’t too happy about biofuels either, because they drive up food prices, which leads to increased inequality (in game terms a negative modifier to equality and a negative modifier to socialist satisfaction).
This discussion applies only to first-generation biofuels, of course. But second-generation biofuels work on a quite different technological and political dynamic (no gravy train for the farmers, for instance), and so probably belong in the more generalised green energy subsidies policy.
Second, the tax evasion problem: As things stand, the only way to make this go away is to cut the taxes that causes it to happen. I think it should also be connected to the level of (organised) crime and to the level of deregulation of the financial system - because coming down hard on the “grey” parts of the financial system and the grey economy in general is a pretty effective real-world way to prevent tax evasion.
And I personally like the idea of putting tax cheats behind bars better than I like the idea of accommodating them. Perhaps a “tax evasion bureaux” policy would be applicable, along the same lines as the welfare fraud department policy?