The sustainability of petroleum-based fuel supply has gained broad attention from the global community due to the increase of usage in various sectors, depletion of petroleum resources, and uncertain around crude oil market prices. Additionally, environmental problems have also arisen from the increasing emissions of harmful pollutants and greenhouse gases. Therefore, the use of clean energy sources including biodiesel is crucial. Biodiesel is mainly produced from unlimited natural resources through a transesterification process. It presents various advantages over petro-diesel; for instance, it is non-toxic, biodegradable, and contains less air pollutant per net energy produced with low sulphur and aromatic content, apart from being safe. Considering the importance of this topic, this paper focuses on the use of palm oil, its by-products, and mill effluent for biodiesel production. Palm oil is known as an excellent raw material because biodiesel has similar properties to the regular petro-diesel. Due to the debate on the usage of palm oil as food versus fuel, extensive studies have been conducted to utilise its by-products and mill effluent as raw materials. This paper also discusses the properties of biodiesel, the difference between palm-biodiesel and other biodiesel sources, and the feasibility of using palm oil as a primary source for future alternative and sustainable energy sources.