How to Start a Biodiesel Business


If the thought of taking everyday products such as tallow, grease or oil and converting them for profit into biodiesel, tickles your inner entrepreneur, get a handle on the practical side of the renewable energy picture. Be advised that making biodiesel can be a highly dangerous endeavor, one that exposes you to toxic materials and can subject you to injury and even death.


  • Determine whether a biodiesel business would be right for you. For some entering the biodiesel space for the first time, biodiesel production is a natural extension of their current operations. Certain institutions, such as universities, casinos and prisons, have a natural stream of readily available feedstock to make biodiesel. If you are able to tap into a large reserve of feedstock for free, you might discover that when the cost of diesel is $3 per gallon, you would net almost $14,000, as opposed to losing $4,000 if you got your feedstock for $2 per gallon. (Ref 3)

Government Compliance

  • You face a number of administrative hurdles on the regulatory front before taking your biodiesel business to the mainstream. Prospective biodiesel manufacturers must first register with the U.S. Environmental Protection Agency, which specifies standards for fuel quality. In Ohio, the state's environmental protection agency requires permits for air pollution-producing equipment and may require permits or treatment of any discharge that goes into municipal wastewater systems. If you plan to build a well, you may need a license to do so. Furthermore, depending on your capacity, you may be expected to implement a spill prevention control and countermeasures plan.


  • Tapping into a consistent and reliable supply of good quality starter material is one of your main challenges as a biodiesel entrepreneur. While restaurants may be an obvious source of waste vegetable oil, churches, clubs, carnivals and fairs are other possible wellsprings. To collect oil legally on a regular basis you'll be expected to sign a contract and provide your own collection bins. You may be able to secure a contract over more well established collectors by being prompt and frequent in your collecting.

Processing Equipment

  • While do-it-yourself kits may be convenient and serviceable for home use, a commercial biodiesel operation should process its biodiesel with equipment designed specifically for commercial production. Examples of commercial processors include the 70-gallon all-metal Turner biodiesel processor and the drum-based processor by Rilla Biodiesel with a 55-gallon capacity. Make Biodiesel offers several recipes for producing different versions of biodiesel, including high-yield batches that meet American Society for Testing and Materials standards, which can be air-dried for several days or weeks before use.

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