Transesterification is the process which turns vegetable oil into biodiesel.
In organic chemistry, transesterification (/ˌtrænzˌɛstərᵻfᵻˈkeɪʃən/) is the process of exchanging the organic group R″ of an ester with the organic group R′ of an alcohol. These reactions are often catalyzed by the addition of an acid or base catalyst. The reaction can also be accomplished with the help of enzymes (biocatalysts) particularly lipases (E.C.188.8.131.52). Strong acids catalyse the reaction by donating a proton to the carbonyl group, thus making it a more potent electrophile, whereas bases catalyse the reaction by removing a proton from the alcohol, thus making it more nucleophilic. Esters with larger alkoxy groups can be made from methyl or ethyl esters in high purity by heating the mixture of ester, acid/base, and large alcohol and evaporating the small alcohol to drive equilibrium.
Source: Wikipedia - Transesterification