Right I have done this before and I am going to copy it for those of you who cannot search.
I have been at this now for about 5 years (100,000miles combined on several engines) so I have long term experience which I will base a lot of this on, on top of that some simple chemistry and physics.
It will cost about 15ppl to make, so if the oil is free making it into bio diesel is not a cost problem, it’s a TIME problem, I used to make 80 litres at a go, would take an entire Saturday morning and the rest. Simple enough to make, big drum of methanol, big bucket of NaOH (Lye) and away you go.
I have run it in 2.5NA (which in terms of what the fuel is doing is the exact same as the 2.5TD) in the past and currently 300tdi Disco and 90.
I gave up making bio diesel after my sources dried up a bit and it was taking too long to go round all the take aways and pubs to get it all. I now get a small quantity now and again from various places and stick it straight into the tank after letting it settle out for a month or so. I take the top 18litres off and pour the bottom 2 into a big bucket, when I have enough I will deal with it.
The Bosch injection pump (200 and 300tdi) is a much more robust pump and deals with waste veg oil (WVO) without a problem. However running it on high percentages can lead to fuel starvation issues as the veg oil viscosity is much higher than diesel and it struggles to get through the fuel filter quickly. This is where these heater kits come in, however for the warmer months it's easier and cheaper just to make sure there is some diesel in with it. In the winter a drop in temp can have the LR struggling to do 15mph as the fuel is moving so slowly, this can also damage the lift pump and it means the injection pump is not getting lubricated well. I had this happen back in December and I didn't even have much veg in the tank the following morning was not that cold and it ran no problem. In the winter I don’t use much veg, maybe a gallon or two per tank.
Bio diesel however is much better for all year running as it is chemically different to veg oil once the transesterification process has been done as it removes the fats from the oil and splits the veg oil molecules in half, therefore making the viscosity of bio diesel much more like that of DERV. Bio diesel actually provides BETTER lubrication to the injection pumps (this new super low sulphur fuel is a killer for injection pumps) but it does cause - veg oil too - the seals to go hard and then they leak; older rubber fuel pipes can also be damaged. Newer polymer seals can resist the bio diesel/VO. So if you do want to use these fuels long term, be prepared for injection pump o ring replacements etc..
The Lucas CAV didn’t much like the veg oil in the winter at all, the pump didn’t cope well with it and even in the summer you didn’t want to have too high a percentage of veg. The Lucas filter system uses a smaller area filter which means even more issues getting fuel through quickly. Like the Bosch the Lucas injection pump does work fine with bio diesel although I would say not to use 100% in the winter because of the type of engine it can make starting extremely difficult even with a good 20/25second glow, this is because the cetane rating (A rating for fuel oil that indicates how easily the fuel ignites and how fast it will burn.) is much lower, so in other words it won’t ignite just so easily. This can be fixed by adding a bit of kero or petrol to keep it all above board in the tax man’s eyes.
If you want to get into using large quantities of veg oil it would be worth looking into making a filtering system so that at least you know it is clean and ready for use, but this will not deal with the viscosity issues.
In conclusion I would say, bio diesel is MUCH better in all respects to SVO/WVO, it deals with the viscosity issue, however do remember it will need the cetane level boosted particularly for older engines to aid in cold starting.
For those of you with TD5’s, I have no experience myself but I do know that it works well on both veg and bio but again make sure there is plenty of diesel in there in the winter, exact percentages I am not sure on but will find out and post it.