Distribution transformers are present in large quantities in the electrical system, in addition to being essential equipment for delivering quality and reliable energy to consumers. This distribution transformers have a dielectric insulation and refrigeration system, with Insulating Mineral Oil (IMO) being the most used. However, the large-scale use of IMO entails a very high environmental risk, because in addition to its fossil origin (petroleum), it also has low biodegradability and is highly toxic and polluting to the environment. In view of this, substitution alternatives for the IMO began to be sought, where, over the years and with technological advances, Insulating Vegetable Oil (IVO) with characteristics similar to the IMO emerged, in addition to being highly biodegradable and providing an alternative sustainable development for the construction of transformers. Thus, the objective of this work is to carry out an analytical study about the characteristics and benefits of using the vegetable fluid for the equipment and for the environment, in addition to comparing the efficiency and cost parameters of IVO and IMO according to current standards. As a contribution, this paper seeks to provide a broad theoretical foundation on IVO and IMO in order to provide conceptualization to agroenergy researchers.