This study explores the possibility of producing low grade crude palm oil (LGCPO)-based biodiesel using a two-stage process in which a phosphonium-based deep eutectic solvent (P-DES) and an alkali are used as catalysts. The pre-treatment of LGCPO was conducted using a P-DES composed of a hydrogen bond donor (i.e. p-toluenesulfonic acid monohydrate) and a salt (i.e. allyltriphenylphosphonium bromide) as a novel recyclable catalyst. The P-DES was used in different dosages in the presence of methanol to reduce the level of free fatty acids (FFA) to the acceptable limit for alkaline transesterification reaction. Batch pre-treatment of LGCPO was carried out to study the influence of P-DES dosage (from 0.25 to 3.5% wt/wt). The effects of other operating parameters such as molar ratio, reaction temperature and reaction time on FFA content reduction, yield of treated LGCPO and FFA to FAME conversion were studied. The P-DES showed high catalytic activity in the pre-treatment of LGCPO. The lab scale investigation proved the viability of esterification and transesterification of oil using P-DES and alkaline catalysts. The biodiesel produced from LGCPO meets the international standards (ASTM D6751 and EN 14214). Three to four times recycling runs of P-DES were achieved without losing its activity. This study introduces a new generation of catalysts for possible batch esterification reaction using P-DES followed by an alkaline transesterification reaction. This study will open a new field for utilizing this strong acid-based DES catalyst for many chemical reactions and industrial applications. (C) 2012 Elsevier Ltd. All rights reserved.