Biodiesel has become more attractive recently because of its environmental benefits and the fact that it is made from renewable resources. The remaining challenges are its cost and limited availability of fat and oil resources. There are two aspects of the cost of biodiesel, the costs of raw material (fats and oils) and the cost of processing. The cost of raw materials accounts for 60 to 75% of the total cost of biodiesel fuel (Krawczyk, 1996). The use of used cooking oil can lower the cost significantly. However, the quality of used cooking oils can be bad (Murayama, 1994). Studies are needed to find a cheaper way to utilize used cooking oils to make biodiesel fuel. There are several choices, first removing free fatty acids from used cooking oil before transesterification, using acid catalyzed transesterification, or using high pressure and temperature (Kreutzer, 1984). In terms of production cost, there also are two aspects, the transesterification process and by-product (glycerol) recovery. A continuous transesterification process is one choice to lower the production cost. The foundations of this process are a shorter reaction time and greater production capacity. The recovery of high quality glycerol is another way to lower production cost. Because little water is present in the system, the biodiesel glycerol is more concentrated. Unlike the traditional soap glycerol recovery process, the energy required to recover biodiesel glycerol is low due to the elimination of the evaporation process. In addition, the process also is simpler than soap glycerol recovery since there is a negligible amount of soap in biodiesel glycerol. This implies that the cost of recovering high quality glycerol from biodiesel glycerol is lower than that of soap glycerol and that the cost of biodiesel fuel can be lowered if a biodiesel plant has its own glycerol recovery facility.