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What is biodiesel?
Biodiesel is vegetable oil or animal fat from which glycerin (glycerol) has been removed to make it more compatible as fuel for diesel engines. Biodiesel is produced during a chemical reaction called transesterification, which transfers esters (energy-storing hydrocarbon chains) from one alcohol molecule to another.

Typical vegetable and animal oils are chemically identified as triglycerides, meaning that their molecules consist of three esters attached to a glycerol "backbone." Glycerol, a relatively complex alcohol, can cause problems in diesel engines, since it can create deposits which interfere with normal engine operation. During transesterification, the esters are transferred from glycerol to a different alcohol molecule (typically methanol). After the transesterification process, the "oily" biodiesel methyl esters (esters attached to methanol) float to the top of the solution, and the "watery" glycerol settles to the bottom. Soon, distinct layers appear, following the principle that "oil and water don't mix." The glycerin layer is drained away, and the biodiesel layer is further processed to improve its purity.
Canola Oil (triglycerides) before transesterification
Biodiesel (methyl esters) and glycerol layers after