Biodiesel refers to actual diesel fuel that is based on vegetable oil, but it has also become a catch-all term for engines that run on straight vegetable oil. Biodiesel is an alternative fuel that is produced through a process that removes the glycerin from vegetable and other natural oils, leaving behind pure biodiesel, also known as methyl esters. Biodiesel can be used in modified diesel engines, or in a blend with regular diesel fuel in standard diesel engines.