Biodiesel is the name of a clean burning alternative fuel, produced from domestic, renewable resources. Biodiesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a biodiesel blend. It can be used in compression-ignition (diesel) engines with little or no modifications. Biodiesel is simple to use, biodegradable, non-toxic, and essentially free of sulphur and aromatics.

Biodiesel refers to the pure fuel before blending with diesel fuel. Biodiesel blends are denoted as, "BXX" with "XX" representing the percentage of biodiesel contained in the blend (i.e.: B20 is 20% biodiesel, 80% petroleum diesel).

Biodiesel is made through a chemical process called transesterification whereby the glycerine is separated from the fat or vegetable oil. The process leaves behind two products -- methyl esters (the chemical name for biodiesel) and glycerine (a valuable by-product usually sold to be used in soaps and other products).

Just like petroleum diesel, biodiesel operates in combustion-ignition engines. Essentially no engine modifications are required, and biodiesel maintains the payload capacity and range of diesel. Pure biodiesel is not compatible with natural rubber, sometimes found in pre-1994 vehicles. Because it is a solvent, it can degrade natural rubber hoses and gaskets, so those would need to be changed to more modern material if B100 is desired. This is not a problem with B20 blends (20 percent biodiesel/80 percent diesel) and below.

Biodiesel exhaust is less offensive. The use of biodiesel and biodiesel blends results in a noticeable, less offensive change in exhaust odour. In fact, equipment operators have compared it to the smell of french fries. Users also report having no eye irritation. Since biodiesel is oxygenated, diesel engines have more complete combustion with biodiesel than with petroleum.

The flash point (the point at which fuel ignites) for biodiesel in its pure form is more than 260 degrees versus about 125 degrees Fahrenheit for regular No. 2 diesel. This makes biodiesel the safest fuel to use, handle and store.

Biodiesel has a full ASTM fuel specification. The American Society of Testing and Materials (ASTM) issued Specification D 6751 for all biodiesel fuel bought and sold in the U.S. in March of 2002, marking a major milestone for the biodiesel industry.

Having a full standard in place helps protect consumers from poor products and reduce the cost of buying and selling biodiesel. While many adopted the provisional specification in 1999 (PS 121), those that didn't had to negotiate a specification. The final passage of D 6751 streamlines the procurement process.

Biodiesel is the first alternative fuel to have fully completed the Health Effects testing requirements of the Clean Air Act. The use of biodiesel in a conventional diesel engine results in substantial reduction of unburned hydrocarbons, carbon monoxide, and particulate matter. Emissions of nitrogen oxides are either slightly reduced or slightly increased depending on the duty cycle and testing methods. The use of biodiesel decreases the solid carbon fraction of particulate matter (since the oxygen in biodiesel enables more complete combustion to CO2), eliminates the sulphate fraction (as there is no sulphur in the fuel), while the soluble, or hydrocarbon, fraction stays the same or is increased. Biodiesel works well with new technologies such as catalysts, particulate traps, and exhaust gas recirculation. Soy biodiesel reduces carbon dioxide by 78% on a life cycle basis.

The cost of biodiesel depends on the market price for vegetable oil. In general, biodiesel blended at a 20 percent level with petroleum diesel costs approximately 20 cents per gallon more than diesel alone. Given the other advantages of biodiesel, though, an emission management system with biodiesel is a least-cost alternative. A study by Booz-Allen & Hamilton, Inc., found fleets using a 20 percent biodiesel blend would experience lower total annual costs than other alternative fuels. Similarly, results reported by the University of Georgia indicate biodiesel-powered buses are competitive with other alternatively fuelled buses with biodiesel prices as high as $3 per gallon.