The finite nature of fossil fuels necessitates consideration of alternative fuels from renewable sources. The term biofuel refers to liquid, gas and solid fuels predominantly produced from biomass. Biofuels include bioethanol, biomethanol, biodiesel and biohydrogen. Biodiesel, defined as the monoalkyl esters of vegetable oils or animal fats, is an attractive alternative fuel because it is environmentally friendly and can be synthesized from edible and non-edible oils. Here, we review the various methods for the production of biodiesel from vegetable oil, such as direct use and blending, microemulsion, pyrolysis and transesterification. The advantages and disadvantages of the different biodiesel-production methods are also discussed. Finally, we analyze the economics of biodiesel production using Malaysia as a case study. (C) 2010 Elsevier Ltd. All rights reserved.