Transesterification During the 1920s diesel engine manufacturers altered their engines to utilize the lower viscosity of the fossil fuel (petrodiesel) rather than vegetable oil, a biomass fuel. The petroleum industries were able to make inroads in fuel markets because their fuel was much cheaper to produce than the biomass alternatives. The result was, for many years, a near elimination of the biomass fuel production infrastructure. Only recently have environmental impact concerns and a decreasing cost differential made biomass fuels such as biodiesel a growing alternative.

The revival of biodiesel production started with farm co-operatives in the 1980s in Austria, but in 1991 the first industrial-scale plant opened in Aschach, also in Austria, with a capacity in excess of 10,000 m³ per year. Throughout the 1990s, plants were opened in many European countries, including the Czech Republic, France, Germany, Sweden. At the same time, nations in other parts of world also saw local production of biodiesel starting up and by 1998, the Austrian Biofuels institute identified 21 countries with commercial biodiesel projects.

In the 1990s, France launched the local production of biodiesel fuel (known locally as diester) obtained by the transesterification of rapeseed oil. It is mixed to the proportion of 5 % into regular diesel fuel, and to the proportion of 30 % into the diesel fuel used by some captive fleets (public transportation). Renault, Peugeot, and other manufacturers have certified truck engines for use with up to this partial biodiesel. Experiments with 50 % biodiesel are underway.

From 1978 to 1996, the U.S. National Renewable Energy Laboratory experimented with using algae as a biodiesel source in the "Aquatic Species Program". A recent paper from Michael Briggs at the UNH Biodiesel Group, offers estimates for the realistic replacement of all vehicular fuel with biodiesel by utilizing algae that has a greater than 50 % natural oil content, which he suggests can be grown on algae ponds at wastewater treatment plants. [1]

Meanwhile, independent results have shown that GreenFuel Technologies[2], a Cambridge, MA company founded by Isaac Berzin, has been successful in producing biodiesel growing algae on flue gas emissions from power plant smokestacks. Using a patented algae bioreactor, GreenFuel utilizes microalgae and a process of photomodulation to reduce emissions: 40% less carbon dioxide and 86% less nitrous oxide. This oil-rich algae can then be extracted from the system and processed into biodiesel, and the dried remainder further reprocessed to create ethanol. The company is testing their method at the MIT cogeneration facility and at an undisclosed 1000-megawatt power facility in the southwestern U.S. [3]