Dependence on fossil fuels for meeting the growing energy demand is damaging the world’s environment. There is a dire need to look for alternative fuels that are less potent to greenhouse gas emissions. Biofuels offer several advantages with less harmful effects on the environment. Biodiesel is synthesized from the organic wastes produced extensively like edible, non-edible, microbial, and waste oils. This study reviews the feasibility of the state-of-the-art feedstocks for sustainable biodiesel synthesis such as availability, and capacity to cover a significant proportion of fossil fuels. Biodiesel synthesized from oil crops, vegetable oils, and animal fats are the potential renewable carbon-neutral substitute to petroleum fuels. This study concludes that waste oils with higher oil content including waste cooking oil, waste palm oil, and algal oil are the most favorable feedstocks. The comparison of biodiesel production and parametric analysis is done critically, which is necessary to come up with the most appropriate feedstock for biodiesel synthesis. Since the critical comparison of feedstocks along with oil extraction and biodiesel production technologies has never been done before, this will help to direct future researchers to use more sustainable feedstocks for biodiesel synthesis. This study concluded that the use of third-generation feedstocks (wastes) is the most appropriate way for sustainable biodiesel production. The use of innovative costless oil extraction technologies including supercritical and microwave-assisted transesterification method is recommended for oil extraction.