Material Insights · Understanding the Material World

Biodiesel (FAME): Production route

Why waste-oil plants need extra steps but earn more

What this tab covers How it is made: the main production routes or, for product families, the main product types and technologies, compared on share of supply, inputs per tonne, plant scale, yield, co-products and unit cost.

All FAME is made by transesterification; the routes differ by feedstock and pre-treatment. Virgin palm, soy and rapeseed oils use simple base-catalysed plants beside crushers and refineries. Waste and residue oils (used cooking oil, tallow, palm oil mill effluent oil, fatty acid distillates) need acid pre-treatment and often distillation, but earn more credits in the EU and California. Cold-weather performance depends on the fatty acid profile, so rapeseed methyl ester dominates northern Europe and palm methyl ester the tropics.

Routes compared

RouteShare of supplyInputs per tonneTypical scaleYieldCo-productsUnit cost
Virgin vegetable oil FAME (palm, soy, rapeseed)about 75-80% of world FAME (indicative; EU FAME was 48% crop-based in 2025, Indonesia and Brazil almost all crop)about 1.0 t oil, 0.1 t methanol, 0.01 t catalyst per t FAME (indicative)100-500 kt a year, often integrated with crushers (Wilmar, ADM, Be8)about 98% on oil (indicative)crude glycerine about 0.1 t per toil is 80-85% of cost; palm oil was about $1,130/t in May 2026 (IMF via IMARC)
Waste and residue oil FAME (UCOME, tallow ME)about 20-25% of world FAME (indicative; 52% of EU FAME was Annex IX feedstock in 2025, EBB)about 1.05-1.1 t waste oil and 0.1 t methanol per t (indicative)20-200 kt a yearabout 90-95% (indicative)glycerine, distillation bottomswaste oils trade at a smaller discount to virgin oil as credit demand rises (indicative)
Fatty acid distillate esterification (PFAD, acid oils)small (indicative)about 1 t fatty acids and 0.12 t methanol per t (indicative)integrated with palm refinerieshighwater instead of glycerinePFAD trades below CPO (indicative)
Enzymatic and supercritical processesunder 1% (indicative)similar to conventionalsmallhighcleaner glycerinehigher (indicative)

How each route works

Virgin vegetable oil FAME (palm, soy, rapeseed)

Refined oil reacts with methanol over sodium methoxide at about 60°C in continuous stirred reactors; glycerine settles out and the ester is washed and dried.

cheap, mature; food-versus-fuel and land-use change risks

IMARC Q2 2026; EBB 2026; indicative Waste and residue oil FAME (UCOME, tallow ME)

High free fatty acid oils are first esterified with acid catalyst, then transesterified; the product is usually distilled to remove impurities.

80-88% GHG savings; supply limited and prone to fraud

European Biodiesel Board Statistical Report 2025-2026 (Jun 2026) Fatty acid distillate esterification (PFAD, acid oils)

Free fatty acids from refining react directly with methanol over acid catalysts or resins.

uses a refining residue; status under EU rules disputed

indicative Enzymatic and supercritical processes

Lipase enzymes or supercritical methanol handle mixed waste oils without soap formation.

flexible on feedstock; enzyme cost

indicative Unit economics are indicative ranges from the sources named; costs move with feedstock and energy prices, plant size and region.