Abstract: Eventually crude oil will be used up, and the use of renewable biomass for manufacturing fuels and chemicals is now growing rapidly.Fatty acid methyl esters (FAME) derived from vegetable oils are usually used as clean biodiesel fuel.In addition, FAMEs along with the byproduct glycerol are also used as intermediates to manufacture chemicals.The recent development of biodiesel was introduced, and the factors affecting the development of biodiesel in China were analyzed.It is realized that the price and steady supply of vegetable oils is a key factor.The related manufacture of chemicals, an important factor for improving profits, was also discussed.Finally, a scheme of bio-refinery with chemicals production was proposed.