Biodiesel has become a substantially important substitute for petroleum diesel because of the great challenges for the future energy development due to environmental pollution, global warming, imminent depletion of fossil fuels, increasing world population, and demands for higher living standards. Currently fossil fuels supply most of the consumed energy because of their high energy density, easy transportability and because they are technically easy to exploit. Since the mid 1950s petroleum has become the world's most important source of energy. Together with natural gas it provides almost two-thirds of the world’s energy.

Biodiesel can play a major role in limiting the global climate change because it cuts emissions of carbon monoxide (CO) by approximately 50% and CO2 by 78% on a net lifecycle basis. In fact, biodiesel is the only alternative diesel fuel that actually reduces major greenhouse gas components in the atmosphere. The use of biodiesel also significantly reduces the emissions of ozone-forming-hydrocarbons, hazardous diesel particulates, and acid rain-causing sulfur dioxide. Furthermore, it virtually eliminates visible smoke and noxious odors and is easily biodegradable so that spillage represents little danger to the environment.

Exploiting renewable energy sources such as biodiesel has not only become essential because of petroleum’s environmental impact but also because fossil fuels are being depleted at an alarming rate. The energy consumption in the world has increased significantly. Assuming that oil will be consumed only from reservoirs, known reserves would be depleted in about 32 years. Thus the world currently steers toward a global energy crisis in around 2039, in which the entire industrialized infrastructure, especially around transportation, would collapse and take away much of the prerequisites that a developed nation takes for granted. Only through changing the focus on renewable energy sources and on biodiesel especially for transportation fuel, can this collapse be avoided. In Thailand these trends have already been observed, which led to Royal Initiative Projects and Promotion Policies to establish a bio-fuel industry. The National Alternative Energy Policy states that by the year 2011, 8% of the nation’s energy consumption will come from sixteen alternative energy sources, including biodiesel and gasohol.