Consumption of energy is the pivotal necessity of our current society.  With the depletion in resources, an earnest need for the alternative sources has become important. On yearly basis, heaps of fuel is imported by Pakistan which is a heavy burden on the economic state of our country. Researches have been carried out to seek an alternative method which becomes an important part in the era of Green technology. Considering this, a fuel is needed which does not deplete the resources and has economic feasibility. With the availability of renewable resources of our country, which comprise of oil waste and crops, a fuel like biodiesel can be utilized as an alternative method for consumption of energy. The paper discusses some of the natural sources for biodiesel production available within Pakistan that eradicate the need of importing petroleum. In order to achieve full scale biodiesel production, Pakistan government has initiated projects such as National Biodiesel Program, Pakistan State Oil initiatives and Alternative Energy Development Board. International companies have also shown keen interest, regarding the development of biodiesel industry in Pakistan. However, there are some inevitable challenges which have been highlighted in the paper. These challenges do not lie in the production, but have occurred due to lack of co- ordination and lapse in policy making by the concerned departments. The impact and benefits are also penned down in order to give an overall view of the biodiesel’s usage in Pakistan.