Fats or oils are mixed with alcohol and a small amount of catalyst to create a reaction. The catalytic reaction creates biodiesel, chemically known as alkyl esters. During the reaction, alcohol replaces glycerine found in the oil or fat. Glycerine is separated from the biodiesel and other by-products through several steps including: settling; washing; and purification. Unreacted methanol is recovered and recycled through an additional distillation process. The valuable co-product, glycerine, can be further refined into higher purities. The small amounts of mineral acid and fatty acids produced can be used in a variety of industrial applications.