Storage stability refers to the ability of the fuel to resist chemical changes during long term storage. These changes usually consist of oxidation due to contact with oxygen from the air. The fatty acid composition of the biodiesel fuel is an important factor in determining stability towards air. Generally, the polyunsaturated fatty acids (C18:2, linoleic acid; C18:3 linolenic acid) are most susceptible to oxidation. The changes can be catalyzed by the presence of certain metals (including those making up the storage container) and light. If water is present, hydrolysis can also occur. The chemical changes in the fuel associated with oxidation usually produce hydroperoxides that can, in turn, produce short chain fatty acids, aldehydes, and ketones.

Under the right conditions, the hydroperoxides can also polymerize. Therefore, oxidation is usually denoted by an increase in the acid value and viscosity of the fuel. Often these changes are accompanied by a darkening of the biodiesel color from yellow to brown and the development of a "paint" smell. When water is present, the esters can hydrolyze to long chain free fatty acids which also cause the acid value to increase.

There is currently no generally accepted method for measuring the stability of biodiesel. The techniques generally used for petroleum-based fuels, such as ASTM D 2274, have been shown to be incompatible with biodiesel. Other procedures, such as the Oil Stability Index or the Rancimat apparatus, which are widely used in the fats and oils industry, seem to be more appropriate for use with biodiesel. However, the engine industry has no experience with these tests and acceptable values are not known. Also, the validity of accelerated testing methods has not been established or correlated to actual engine problems. If biodiesel’s acid number, viscosity, or sediment content increase to the point where they exceed biodiesel’s ASTM limits, the fuel should not be used as a transportation fuel. Additives such as BHT (butylated hydroxytoluene) and TBHQ (t-butylhydroquinone) are common in the food industry and have been found to enhance the storage stability of biodiesel. Biodiesel produced from soybean oil naturally contain some antioxidants (tocopherols, i. e., vitamin E), providing some protection against oxidation (some tocopherol is lost during refining of the oil prior to biodiesel production). Any fuel that will be stored for more than 6 months, whether it is diesel fuel or biodiesel, should be treated with an antioxidant additive.