Biodiesel refers to diesel-equivalent biofuel usually made from vegetable oils or animal fats. Several different kinds of fuels are biodiesel: usually biodiesel refers to an ester, or an oxygenate, made from the oil and methanol, but alkane (non-oxygenate) biodiesel, that is, biomass-to-liquid (BTL) fuel is also available.

Sometimes even unrefined vegetable oil, or straight vegetable oil, is incorrectly called "biodiesel". While straight vegetable oil can be expensive to purchase than petroleum diesel, but can be made at home for much cheaper than either. This differential may diminish due to economies of scale, the rising cost of petroleum and government tax subsidies.