Due to the environmental problems caused by the use fossil fuels, considerable attention has been made to biodiesel production as an alternative to petrodiesel. Biodiesel is an ecofriendly, alternative diesel fuel prepared from domestic renewable resources i.e. produced from vegetable oils and animal fats. It is a renewable source of energy seems to be an ideal solution for global energy demands including Ethiopia as well. The general method to produce biodiesel is transesterification of non-edible oil with methanol in the presence of either base or strong acid catalysts. Transesterification reaction is quite sensitive to various parameters. An ideal transesterification reaction differs on the basis of variables such as fatty acid composition and the free fatty acid content of the oil. Other variables include reaction temperature, ratio of alcohol to vegetable oil, catalyst, mixing intensity, purity of reactants. This review paper describes the fuel properties of biodiesel, production process (transesterification) and the most important variables that influence the transesterification reaction.
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