Usually derived from vegetable oils -- soy is very popular these days, but animal fats can also be used -- biodiesel is made through a chemical process called transesterification which essentially splits the oil into two parts: alkyl esters and glycerine; the esters are the fuel, while the leftover glycerine is often used to make soap and other beauty products.
...Like its petrol equivalent, biodiesel tends to turn a little gelatinous at low temperatures, so it’s not always suitable for year-round use, depending on the climate where you live; this problem can be addressed by going with a mixture of biodiesel and petrodiesel (you’ll see it on the pumps: B50 is a 50/50 mix; B20 is 20% biodiesel, and so on).
...Biodiesel is still growing, and so it isn’t readily available all over the place, as gasoline and diesel fuel is, so you’ll have to pay attention to your gas gauge and a know a reliable source or two.
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