Biodiesel is produced primarily through the transesterification reaction of triglycerides and alcohol usually in the presence of a metal catalyst and can be visualized by the chemical re­action equation found in Scheme 1. where "R" groups are functional carbon chains varying in length and level of saturation and "M" is a metal, usually referring to sodium or potassi­um. The resultant glycerol that is produced is generally treated as a by-product and either sold for commodities use or burned to provide heating if necessary. This process is depend­ent on water content and pH, which dictates pre-processing demands in order to minimize the formation of soaps and maximize the production of wanted fatty acid ester compounds.

During this reaction the fatty acids tails are removed from the glycerol backbone leaving a glycerol molecule and one to three fatty acid esters (almost always either ethyl or methyl al­cohol yielding a methyl or ethyl ester). These fatty acid methyl esters (FAME) or ethyl esters (FAEE) will vary in characteristics as a fuel based on carbon chain length as well as degree of unsaturation and location of unsaturated bonds. Some of the characteristics of biodiesel that are affected by fatty acid chemistry are viscosity, cloud point, and freezing point, among other factors important to engine performance. In general, there are several trade­offs that must be made with regards to saturation of fatty acids, branching of the fatty acid chain, and the carbon chain length, as each will have positive and negative attributes affect­ing fuel performance.

As the length of the molecule increases, the cetane number, and thus the heat of combustion, increases, this in turn decreases NOx emissions. However, as the length of the fatty acid chain increases, the resultant biodiesel has increased viscosity leading to a pre-heating re­quirement. Also, as fatty acids become more branched there is a benefit of the gel point (the temperature at which the fuel becomes gel-like and has complications flowing through fuel lines) decreasing. The negative to higher branching is that the cetane number will decrease due to a more difficult combustion. As saturation of the fatty acid chain increases, there is a decrease in NOx emissions and an improvement in fuel stability. As saturation increases, there is an increase in melting point and viscosity, both undesirable traits in a fuel.

Since there are so many trade-offs in the production of biodiesel, it is very difficult, if not impossible, to pick one ideal source of fatty acid for conversion to fuel. The multitude of cli­mates across the globe will necessitate various traits in fuel such as the gel point, melting/ freezing point, and oxidative stability. This leads to the argument of localized production of specific biomass sources that can be tailored to produce the types of lipids most suited to fuel that specific region, which will keep transportation costs down, as well as provide for the local economy. In following this method, there will be ample biomass produced to meet the specific needs of each climate, reducing environmental stresses that can occur due to overproduction for large scale purposes.