Vegetable oil is an example of a biofuel. A biofuel is simply fuel drawn from a renewable, biological resource, such as corn ethanol, biodiesel and waste vegetable oil (WVO).
Grease-car owners choose waste vegetable oil, or WVO, for their cars. They filter the food bits out of a restaurant's WVO, also known as fryer grease, to make it SVO, or straight vegetable oil, which won't clog car engines. Grease cars can also run on SVO purchased from a store, like a big jug of canola oil from Costco. But this method costs more than regular diesel, not less.
The problem with vegetable oil is that it's not approved by the Environmental Protection Agency (EPA) for use as fuel. It's not exactly illegal -- it won't land you in jail -- but it could get you fined.
Other biofuels, like ethanol and biodiesel, are EPA-approved. They've been researched and tested heavily by the EPA and are government regulated like any other fuel source. In terms of EPA approval, this means that the ethanol or biodiesel you can buy from a commercial seller is in compliance with the Clean Air Act.
The reason you're not supposed to use WVO to power your car is that it hasn't been around long enough for the EPA to test its environmental friendliness. And since people just get it for free from restaurants -- just go up to the delivery entrance and haul away some french fry grease -- there's no way to make sure it meets the requirements of the Clean Air Act, which includes strict rules regarding how fuel is processed. Greasers are just storing fryer grease in their garages, filtering it and filling up.
And what can the EPA do to you for running your car on what may be the most carbon-neutral fuel source in the world? It can fine you $32,500 per day [source: Montefinise]. The EPA could also charge an additional $2,750 for modifying the car to run on a non-EPA-approved fuel [source: Montefinise].
While the EPA might be investigating grease-car owners, they have yet to fine anyone for the offense. The same cannot be said for state government agencies -- but their beef with WVO isn't about environmental friendliness.