The process of converting vegetable oil into biodiesel fuel is transesterifaction. This means adding a catalyst (such as lye) to an alcohol (ethanol or methanol), heating and stirring this mixture before adding it to vegetable oil (fresh or waste fryer oil) to yield biodiesel (ethyl ester or methyl ester). Glycerin is left on the bottom after the mixture has settled.
Dissolve the catalyst in the ethanol, which will require stirring and slight heating. Add the ethanol/catalyst mixture to the oil and stir the mixture vigorously. After 120 minutes of reaction time at room temperature, the mixture should sit overnight while separation occurs. Pour off the biodiesel from the top of the container.
Water is sprayed at low velocity on top of a tall column of biodiesel. The water will wash away any excess alcohol and catalyst. It will emulsify somewhat with the biodiesel. The less this is agitated the better; agitation causes more emulsification and less useful biodiesel. Let sit for 24-48 hours until the water has settled.