In the era of the increase in globalization, this led to increase in industrialization and motorization. It’s obvious that with the increase in motorization the consumptions of auto fuels had been increased since long. This may lead to a reduction of fuels (diesel & petrol). Also, environmental issues have arisen from the emissions of toxic pollutants and greenhouse gases. Hence, it is necessary to look for an alternate energy source to respond this problem. To overcome this problem the replacer of fuel in CI engines had been introduced, i.e. “biodiesel”. Biodiesel is composed of fatty acid and some vegetable oils. This review paper briefly describes different biodiesel production methods, especially the production of biodiesel using palm methyl ester (PME) oil, by transesterification process. In addition, it also compares the yield of biodiesel produced form mill effluents and palm oil by-products using flask and batch reactor.