Pros

Positive Energy Balance - Biodiesel has a net energy balance of 2.8, with a range of -0.27 to +5.3 based on different assumptions for how to assign energy usage and by-products (all figures are based on soy oil, with acknowledgement that other feedstocks could be higher).

Cheap Feedstocks - The production process can turn used oils, greases and fats into a useable fueling product. These include used cooking oil and greases, which can be obtained inexpensively or free as some have no other uses.

GHG Reduction - According to an EPA study, the use of B20 can reduce hydrocarbons by 20%, carbon monoxide by 11% and particulate matter by 10%; it does increase nitrous oxide by 2%. B100 has 0% sulfer dioxide output. These environmental benefits makes it ideally suited for marine and mining uses, where there are heavier regulations on animal life and air quality, respectively.

Biodegradable - Biodiesel is non-toxic and biodegradeable. Any spillage in the production or tranportation process will have a far smaller environmental impact as compared to a petroleum spills. Large biodiesel spills may still need some form of treatment.

Economic Benefits - Used greases and fats can provide an additional source of revenue. More importantly, many third world countries have begun growing high oil output crops such as palm and jatropha trees, which could provide a fiscal spark to these economies.

Ready To Use - Biodiesel, in any mixture, requires no engine modifications to use in diesel-powered vehicles. There can, however, be certain breakdowns depending on the previous use of the vehicle with traditional #2 diesel (see below).

Home Heating - Biodiesel can be used as a more environmentally friendly replacement for home heating oil.

Third World Benefit - A number of third world countries are located in warm climates, which are ideally suited for palm and jatropha planting. Doing so can provide a large enough supply of feedstock oil to produce fuel for their own use as well as increase exports to developed countries seeking lower priced biodiesel feedstocks.

Cons

Gelling - Biodiesel can gel in colder weather. The gel point is a function of the feedstock and mixture of biodiesel to diesel. Click here for a Cold Weather Study or here for a Cold Weather Tip Sheet

Automotive Breakdowns - Biodiesel can clog filters due to the release of deposits that attached to tank and pipe walls from previous diesel use. This problem is most associated with mixes over B20, however once the old deposits have been released the clogging of filters no longer becomes an issue. Using mixtures over B20 has been found to degrade gaskets and seals over time.

Poor Quality - Many producers have been unable to produce biodiesel that meets ASTM 6751 quality due primarily to their inability to remove all impurities and water during the washing and refining processes.

Reduced Fuel Efficiency - The EPA found that the use of B20 can reduce fuel efficiency by 1 to 2%.

More Expensive - B100, and other diesel/biodiesel blends, are more expensive to consumers than #2 diesel. This is the result of the rapidly rising feedstock prices and production problems of producers.

Unavailable - There are currently around 1,000 filling stations that carry some blend of biodiesel. The majority of these stations are in the Midwest, with the most spread throughout Illinois, Indiana and Minnesota. To find stations near you click here.

Highly Combustable - The biodiesel production process is highly combustable due to the chemicals used. This is not uncommon in the residential setting and the commercial setting.