The methodology of life cycle assessment was applied to analyze the primary energy consumption and environmental emissions of biodiesel deriving from residual frying oil, compared with conventional diesel pathway. The conclusions are as follows: fossil energy consumption decreases by 65.7%, especially oil consumption decreases by 91.8%, and the criterion emissions also decreases; the total greenhouse gas emissions decreases by 86.6% with CO2 emission decreasing by 88.1%, according to conversion by means of global warming potential. It fully showed that this kind of biodiesel is an environmental friendly fuel in line with the trend of energy saving and emission reduction.