Essentially, biodiesel is derived by a chemical process known as transesterification. This basically involves the replacement of the glycerol component of the oil being used with an alcohol, which is done in the presence of a catalyst. Although it may sound complicated, making biodiesel at home is quite a simple process. Farms all over the world have been using it for several generations; it is only becoming popular in the mainstream because of the increasing need felt for finding viable alternatives to fossil fuels. By using easily available ingredients, simple tools, and uncomplicated techniques, one can make it at home, thus, reaping the fuel cost-cutting benefits of its production.
Read more at Buzzle: http://www.buzzle.com/articles/how-to-make-biodiesel-making-biodiesel-at-home.html