The process to obtain fuel from a fat is not a new process. It was as early as 1853, when scientists E. Duffy and J. Patrick conducted the first transesterification of a vegetable oil, many years before the first diesel engine became fully functional. Transesterification is the process of using an alcohol, such as ethanol or methanol, in the presence of a catalyst like sodium hydroxide or potassium hydroxide, to chemically break the molecule of the raw renewable oil into methyl or ethyl esters of the renewable oil with glycerol as a by-product.

We may say the first vehicle biodiesel-powered was Rudolf Diesel's prime model, a single 10 feet iron cylinder with a flywheel at its base, that ran with this fuel for the first time in Augsburg, Germany on August 10, 1893, later he demonstrated his engine powered by peanut oil-a biofuel, receiving the "Grand Prix" at the World Fair in Paris, France in 1900. Diesel believed that the utilization of a biomass fuel was the future of his engine, as he stated in his 1912 speech saying "the use of vegetable oils for engine fuels may seem insignificant today, but such oils may become, in the course of time, as important as petroleum and the coal-tar products of the present time."

However during the 1920's, diesel engine manufacturers decided to alter their engines utilizing the lower viscosity of the fossil fuel, best know as petrodiesel, rather than such biomass vegetable oil fuel. All petroleum industries were able to make inroads in fuel markets because their fuel was much, much cheaper to produce than the biomass alternatives, ignoring that years ahead it would bring high pollution costs.

A near elimination of the biomass fuel production infrastructure was for many years the result of petrodiesel commercialization. Vegetable oil powered heavy duty vehicles in South Africa before World War II. Later, from 1978 to 1996, the U.S. National Renewable Energy Laboratory experimented with using algae as a biodiesel source in the "Aquatic Species Program". In the 1990's, France launched the local production of biodiesel fuel, known locally as diester, obtained by the transesterification of rapeseed oil.

Today, environmental impact concerns and a decreasing cost differential made biomass fuels such as biodiesel a growing alternative and, in remembrance of Rudolf Diesel first German run, August 10 has been declared International Biodiesel Day.