Biodiesel refers to a diesel-equivalent, processed fuel derived from biological sources (such as vegetable oils), which can be used in unmodified diesel-engined vehicles. It is thus distinguished from the straight vegetable oils (SVO) or waste vegetable oils (WVO) used as fuels in some modified diesel vehicles.

In this article's context, biodiesel refers to alkyl esters made from the transesterification of vegetable oils or animal fats. Biodiesel is biodegradable and non-toxic, and typically produces about 60% less net carbon dioxide emissions than petroleum-based diesel, as it is itself produced from atmospheric carbon dioxide via photosynthesis in plants. Pure biodiesel is available at many gas stations in Europe.

Some vehicle manufacturers are positive about the use of biodiesel, citing lower engine wear as one of the benefits of this fuel. However, as biodiesel is a better solvent than standard diesel, it 'cleans' the engine, removing deposits in the fuel lines, and this may cause blockages in the fuel injectors. For this reason, car manufacturers recommend that the fuel filter is changed a few months after switching to biodiesel (this part is often replaced anyway in regular servicing). Most manufacturers release lists of the cars which will run on 100% biodiesel -- for example, the summary list provided by Volkswagen is under the title "Use of biodiesel in Volkswagen cars" further down the right-hand side of this page (note it is best to consult with your car manufacturer before using biodiesel for the first time).

Other vehicle manufacturers remain cautious over use of biodiesel. In the UK many only maintain their engine warranties for use with maximum 5% biodiesel - blended in with 95% conventional diesel - although this position is generally considered to be overly cautious. Peugeot and Citroën are exceptions in that they have both recently announced that their HDI diesel engine can run on 30% biodiesel. Scania and Volkswagen are other exceptions, allowing most of their engines to operate on 100% biodiesel.

Biodiesel can also be used as a heating fuel in domestic and commercial boilers. Existing oil boilers may require conversion to run on biodiesel, but the conversion process is believed to be relatively simple.

Biodiesel can be distributed using today's infrastructure, and its use and production are increasing rapidly. Fuel stations are beginning to make biodiesel available to consumers, and a growing number of transport fleets use it as an additive in their fuel.

Biodiesel is generally more expensive to purchase than petroleum diesel but this differential may diminish due to economies of scale, the rising cost of petroleum and government tax subsidies. In Germany, biodiesel is generally cheaper than normal diesel at gas stations which sell both products.

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