Essential requirements for biofuel are that (a) it should be produced from renewable raw material, and (b) it should have a lower negative environmental impact than that of fossil fuels. Apart from direct assessment of the engine emissions, environmental impact is also determined by performing life cycle analysis. Life cycle energy balance depends on specific climatic conditions and the agro- and processing technologies used. Rapeseed oil methyl ester life cycle energy ratios in Lithuanian conditions have been calculated as a function of rapeseed productivity, oil pressing and transesterification technologies used. Opportunities to improve biodiesel fuel life cycle energy efficiency, by implementing new technologies in agriculture as well as in industrial processing, were reviewed. The effectiveness of new technologies was evaluated on the basis of energy balance comparison. (C) 2003 Elsevier Ltd. All rights reserved.