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Biodiesel is a type of biofuels (renewable energy source) made from vegetable oils (rapeseed oil, soybean oil, palm oil, jatropha oil, etc.) or animal fats through a process called transesterification. Biodiesel is also referred to as fatty acid methyl ester (FAME), which is the new compound that is created when vegetable oil or animal fat is chemically reacted with alcohol. This chemical reaction also produces a by-product called glycerine (90% biodiesel, 10% glycerine).

Biodiesel is an alternative fuel for diesel engines due to its physico-chemical properties are almost same. Its primary advantages are that it is one of the most sustainable fuels currently available and it is also non-toxic and biodegradable. It can also be used directly in most diesel engines without requiring extensive engine modifications.