The process of converting vegetable oil into biodiesel fuel is called transesterification and is luckily less complex than it sounds. Chemically, transesterification means taking a triglyceride molecule, or a complex fatty acid, neutralizing the free fatty acids, removing the glycerin, and creating an alcohol ester. This is accomplished by mixing methanol (wood alcohol) with lye (sodium hydroxide) to make sodium methoxide. This dangerous liquid is then mixed into vegetable oil. The entire mixture then settles. Glycerin is left on the bottom and methyl esters, or biodiesel, is left on top. The glycerin can be used to make soap (or any one of 1,600 other products) and the methyl esters is washed and filtered. The resulting biodiesel fuel when used directly in a Diesel engine will burn up to 75% cleaner than petroleum diesel fuel.
Transesterification was conducted as early as 1853. One of the first uses of biodiesel (transesterified vegetable oil) was powering heavy vehicles in South Africa before World War II.

Why make biodiesel? Vegetable is a much more dense substance than diesel but biodiesel is very similar to diesel fuel. Biodiesel benefits from a viscosity that is twice that of diesel fuel and a molecular weight is roughly 1/3 of vegetable oil. Most Diesel engines were designed to use highly lubricating, high sulfur content fuel. Recent environmental legislature has forced diesel fuel to contain only a minimum amount of sulfur for lubricating purposes. Thus, the high viscosity of biodiesel makes it a perfect fuel of choice for diesel engines