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Bio-diesel...
Runs on waste grease from restaurants etc, added into a processing machine and mixed with a bit of regular diesel. Gets way up there in the mpg range, but because it runs on significantly less diesel, costs pennies per gallon.
Easy to do with VW.
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Baz, You're extremely close. Like you said, that's Bio-diesel.
Any diesel car can run, unmodified, on bio-diesel. because the process of "mixing" the fuel up creates a stable, cheap fuel.
A grease car runs on straight used fryer grease (vegatable oil) strained and poured into a slightly modified car.
The modifications essentially consist of a heated fuel tank, heated lines and a special heated filter.
The car is started on diesel and warmed up, then switched to grease and run on that until just before shutting it down, when you switch back to diesel to get the grease out of the unheated injectors for the next cold start.
These mods have been done to all kinds of diesel cars and trucks, new and old.
Heres one of many sites that suppourt
grease cars
Both ideas are good. I personally like the greasecar idea because after the initila investment of the modifications, your fuel is FREE!!! you just need to make a deal with a resturant or two (who usually have to pay to have the grease hauled away) to get a supply of fuel.