High energy prices, energy and environment security, concerns about petroleum supplies are drawing considerable attention to find a renewable biofuels. Biodiesel, a mixture of fatty acid methyl esters (FAMEs) derived from animal fats or vegetable oils, is rapidly moving towards the mainstream as an alternative source of energy. However, biodiesel derived from conventional petrol or from oilseeds or animal fat cannot meet realistic need, and can only be used for a small fraction of existing demand for transport fuels. In addition, expensive large acreages for sufficient production of oilseed crops or cost to feed animals are needed for raw oil production. Therefore, oleaginous microorganisms are available for substituting conventional oil in biodiesel production. Most of the oleaginous microorganisms like microalgae, bacteria, fungi and yeast are all available for biodiesel production. Fungi, especially endophytic fungi is more advantageous than other microorganisms. Besides the production of vitamins, enzymes and novel secondary metabolites, it has been reported that certain endophytic fungi have the capacity to accumulate high amount of lipid (up to 35% of dry biomass), and simultaneously secrete cellulase enzyme. Some researchers have documented that endophytic fungi can produce laccase and xylanase. Therefore, secretion of relevant enzymes for lignocellulose degradation by endophytic fungi enables them to be cultured on various cheap plant materials (straw, other agro-residues or plant-wastes, etc.,).
