The bad news is, you can‘t just use pure vegetable oil as a safe, clean fuel. The good news is, biodiesel can be made relatively simply from a wide variety of oil-producing crops or animal fats. Currently in the U.S., the most cost-effective method starts with soybean oil. Through a chemical process known as transesterification, the oil is reacted with an alcohol such as methanol or ethanol at a processing plant to produce biodiesel and glycerol (which can then be used in a variety of household products).