Theory-based evaluation (TBE) is an effectiveness assessment technique that critically analyses the theory underlying an intervention. Whilst its use has been widely reported in the area of social programmes, it is less applied in the field of energy and climate change policy evaluations. This paper reports a recent study that has evaluated the effectiveness of the national biofuel policy (NBP) for the transport sector in Malaysia by adapting a TBE approach. Three evaluation criteria were derived from the official goals of the NBP, those are (i) improve sustainability and environmental friendliness, (ii) reduce fossil fuel dependency, and (iii) enhance stakeholders' welfare. The policy theory underlying the NBP has been reconstructed through critical examination of the policy and regulatory documents followed by a rigorous appraisal of the causal link within the policy theory through the application of scientific knowledge. This study has identified several weaknesses in the policy framework that may engender the policy to be ineffective. Experiences with the use of a TBE approach for policy evaluations are also shared in this report.