The method of production of biodiesel using lipase as catalyst has not yet been implemented in industrial scale due to certain constrains like high cost of enzyme,
exhaustion of enzyme activity and enzyme inhibition by methanol. Enzymes such as proteases and carbohydrases have been used industrially for a number of years and corner the largest share of the worldwide enzyme market. While lipases at present account for less than 5% of the market, this share has the potential to increase dramatically via a wide range of different applications. The higher production costs of industrial lipase as compared with proteases and carbohydrases seem to be the main obstacle that hampers its wider industrial application. In order to overcome this limitation, lipase has to be repeatedly used, which is achieved by using it in immobilized form. Details of incentives of lipase immobilization are explained in Section 6.8.1. However, when lipase is used in immobilized form, another problem arises. The deposit of the by-product glycerol coating the immobilized lipase is formed during the process due to the low solubility of glycerol in biodiesel, which competitively inhibits the enzyme and reduces its activity by blocking the active sites (Dossat et al., 1999; Du et al., 2004; Al-Zuhair et al., 2008).

Another hindrance of biodiesel production by lipase is the inhibition of the enzyme by methanol. The effect of alcohol, specifically methanol, on the enzymatic production of biodiesel has been thoroughly discussed in literature. While it is a reactant, it also inhibits the enzyme. It has been found that biodiesel production increases with increasing methanol concentration up to oil to methanol ratio of 3:1 and then decreases when methanol concentration is further increased (Shimada et al., 1999; Al-Zuhair et al, 2007; Al-Zuhair et al, 2008). This was also found by Noureddini et al (2005), although the ratio was higher (7.5:1). In general, it is widely accepted that methanol which is completely dissolved in the substrate mixture does not inactivate the lipases (Shimada et al., 1999; Shimada et al., 2002; Al-Zuhair et al., 2007). Lipases, however, are inactivated by contact with insoluble methanol that exists as drops in the oil; thereby the catalytic activity of the transesterification reaction is decreased. The deactivation of lipase with contact with insoluble methanol is due to the strong polarity of the latter, which tends to strip the active water from the active sites of the enzyme (Lara and Park, 2004). The inhibitory effect of methanol is large at the beginning of the reaction, but with increasing oil conversion it decreases because it is consumed in the reaction and hence its concentration decreases, in addition its solubility is higher in the product methyl ester than in the triglyceride (Shimada et al., 1999). On the other hand, the inhibition due to the blocking of the active sites of the catalyst by glycerol is absent at the beginning of the reaction and becomes larger at higher oil conversions.

Lipase is also sensitive towards the water contents. It has been reported that up to 500 ppm water in reaction mixture decreased the rate of methanolysis; however the equilibrium of the reaction was not affected (Shimada et al., 1999). The effect of water content on the production of biodiesel from soybean oil using lipases from R. Oryzae (Kaieda et al., 1999), C. rugosa and P. Fluorescens (Kaieda et al., 2001), Novozym 435 (Shimada et al., 1999) and Burkholderia cepacia (Noureddini et al., 2005) have all shown that enzyme activity was low in absence of water; with the addition of water a considerable increase in lipase activity was observed, which is explained by the unique property of interfacial activation of lipase (Verger et al., 1973; Brady et al., 1990). The activity of lipases is low in monomeric solutions of lipid substrates but a configuration change and activity enhances strongly at the water-lipid interface. Activation of the enzyme involves unmasking and restructuring of the active site through conformational changes of the lipase molecule, which requires the presence of oil-water interface. An experimental approach to determine the activation of the lipase at the interface, proposed by Rooney and Weartherley (2001), was used by Al-Zuhair et al. (2003) to determine that the activity of lipase from C. rugusa at the oil interface, and was found to be 15.7% higher than that in the bulk. With the increased addition of water, the amount of water available for oil to form oil-water droplets increases, thereby, increasing the available interfacial area. However, excess water stimulates the competing hydrolysis reaction, since lipases usually catalyze hydrolysis in aqueous media. The optimum water content is a compromise between minimizing hydrolysis and maximizing enzyme activity for the transesterification reaction. The range of water content at which the enzyme maintains its methanolysis activity varies significantly from one type of lipase to another. For example, the activity of Novozym 435 significantly drops at water contents higher than only

O. 1% (Shimada et al., 1999), whereas lipase from R. meihei maintains its methanolysis activity at water contents of up to 20% (Al-Zuhair et al., 2006; Tweddell et al., 1998).