Biodiesel Basics From Biodiesel.Org:

What is biodiesel?
Biodiesel is the name of a clean burning alternative fuel, produced from domestic, renewable resources. Biodiesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a biodiesel blend. It can be used in compression-ignition (diesel) engines with little or no modifications. Biodiesel is simple to use, biodegradable, nontoxic, and essentially free of sulfur and aromatics.

How is biodiesel made?
Biodiesel is made through a chemical process called transesterification whereby the glycerin is separated from the fat or vegetable oil. The process leaves behind two products -- methyl esters (the chemical name for biodiesel) and glycerin (a valuable byproduct usually sold to be used in soaps and other products).
 

Is Biodiesel the same thing as raw vegetable oil?
No! Fuel-grade biodiesel must be produced to strict industry specifications (ASTM D6751) in order to insure proper performance. Biodiesel is the only alternative fuel to have fully completed the health effects testing requirements of the 1990 Clean Air Act Amendments. Biodiesel that meets ASTM D6751 and is legally registered with the Environmental Protection Agency is a legal motor fuel for sale and distribution. Raw vegetable oil cannot meet biodiesel fuel specifications, it is not registered with the EPA, and it is not a legal motor fuel.

For entities seeking to adopt a definition of biodiesel for purposes such as federal or state statute, state or national divisions of weights and measures, or for any other purpose, the official definition consistent with other federal and state laws and Original Equipment Manufacturer (OEM) guidelines is as follows:

Biodiesel is defined as mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats which conform to ASTM D6751 specifications for use in diesel engines. Biodiesel refers to the pure fuel before blending with diesel fuel. Biodiesel blends are denoted as, "BXX" with "XX" representing the percentage of biodiesel contained in the blend (ie: B20 is 20% biodiesel, 80% petroleum diesel).

Why should I use biodiesel?
Biodiesel is better for the environment because it is made from renewable resources and has lower emissions compared to petroleum diesel. It is less toxic than table salt and biodegrades as fast as sugar. Since it is made in the USA from renewable resources such as soybeans, its use decreases our dependence on foreign oil and contributes to our own economy.