Utilizing any type of unused plant-derived oils, also known as straight oil (SO), as feedstock is economically infeasible, resulting in a high final cost of the biodiesel. Above that, it raises ethical questions as this feedstock competes with food stock. Shah and Gupta (2006) argued that it is more reasonable to use inedible oils such as Jatropha oil. This argument however is debatable, as a land has to be developed for plantation, and it would be more advisable then to use it to plant something that can be used as food stock. The only sensible way to overcome this dilemma is to use waste oils (WO) and waste fats (WF) as raw materials for biodiesel production. In addition to using feedstock that does not compete with food stock in this case, the use of WO and WF is considered an important waste minimization and recycling process, no less than half a million tons of which are discarded every year in Japan alone (Kaieda et al., 1999).

In comparison to SO, WO has significantly higher amounts of water, around 2000 ppm and FFA, 10-15% (Zhang et al, 2003; Lai et al, 2005), as well as higher polymerization products. As explained earlier, the high FFA content renders alkali — catalysts processes not suitable, and the use of chemical catalysts is limited in this case to the acidic ones (Zhang et al, 2003). Due to the comprehensible attractive benefits of WO, biodiesel production from this feedstock has been investigated using acidic catalysts, despite being much slower and more hazardous catalysts compared to the other chemical catalyst, namely the alkaline (Al-Widyan and Al-Shyoukh, 2002; Al-Widyan et al., 2002; Zhang et al, 2003). Methanolysis of triacylglycerols (TAGs) with a lipase is considered one of the effective reactions for production of biodiesel fuel from WO. Shimada et al. (2002) have successfully produced biodiesel from WO using immobilized lipase from C. antarctica. They have further proved that the yield of biodiesel production from WO, containing up to 2000 ppm water, was comparative to that from SO. WO containing around 500 ppm water was also successfully utilized to produce biodiesel, using lipase from bacterial, P. cepacia, and yeast, C. antarctica, sources in free and immobilized on ceramic beads forms, in the presence and absence of n-hexane (Al-Zuhair et al., 2008).

Animal fats have also been used for biodiesel production (Ali et al, 1995). However, due to the high melting point of animal fats, that is usually near the denaturation temperature of lipase, and because methanol and animal fat are immiscible, the reaction system has to take place in an organic solvent to dissolve the solid fat (Ma et al., 1999). The use of organic solvent, however, requires the addition of solvent recovery unit. To overcome this drawback, thermostable lipases, which have relatively high optimum temperature, can be used.