First, you must filter the oil to remove any grit. This is especially important if you are using old frying oil from restaurants. Pouring straight unfiltered oil into a fuel tank will destroy a fuel system, since grit clogs and abrades internal components. John Galt of the Make Biodiesel Organization recommends first filtering through a 20 micron filter, and finally filtering through a 5 micron filter.
After filtering, straight vegetable oil can be used, but only if warmed up. Cold vegetable oil is too thick to be used in many modern systems. For straight vegetable oil, the fuel system temperature has to be above 80 degrees Fahrenheit, according to Galt. In the wintertime, oil will thicken up significantly. You have to use special additives, designed specifically for vegetable oil, to keep the oil thin.
Matt Steiman of Wilson College points out that all water should be removed prior to use.The easiest way to do this is let the oil sit still for a few days. Since oil and water separate, the water will eventually settle out to the bottom. Skim off the oil from the top only, leaving the water behind in the settling tank. While this works, it does not guarantee 100 percent water removal. Steiman recommends an entire process, utilizing fish tank bubblers, to separate out all the water.
All vegetable oil contains glycerin. Glycerin is a water-based fat, which is further refined to make water soluble lubricants and industrial cutting fluids. You have to remove the glycerin from the oil before it can be considered a fuel grade oil. This is done by a chemical process utilizing lye and methanol. These chemicals are extremely volatile and caustic. Only chemists or other qualified professionals should perform this process using the correct equipment.