The biodiesel will initially comprise 85% used cooking oil collected from around 900 McDonald's outlets, with the rest derived from rapeseed oil.
However the food chain says it should eventually be able to completely replace the 6 million litres of diesel its fleet used last year with the cooking oil from its 1200 restaurants in Britain.
In related news, a US chemist claims to have developed a nano-technology that can boost the efficiency of converting vegetable oil or animal fat into fuel.
US Department of Energy program director Victor Lin has developed a nanosphere-based catalyst that reacts vegetable oils and animal fats with methanol to produce biodiesel, which could make production more economical and environmentally friendly.
The technology allows efficient conversion of vegetable oils or animal fats into fuel by using nanospheres with acidic catalysts to react with the fatty acids and basic catalysts for the oils.
The system replaces sodium methoxide - a toxic, corrosive and flammable catalyst - in biodiesel production, which eliminates several production steps including acid neutralisation, water washes and separations. All those steps dissolve the toxic catalyst so it cannot be used again.
Lin is working with venture capital firm Mohr Davidow Ventures and the Iowa State University Research Foundation to establish a start-up company to produce, develop and market the technology.
With funding from the US Department of Energy, the new company Catilin will build a biodiesel pilot plant that aims over the next 18 months to produce enough of the nanosphere catalysts to increase biodiesel production from a lab scale to a plant scale of 1135 litres per day.
Lin said the technology could change how biodiesel was produced; the system could make production cheaper, faster and less toxic, as well as produce a cleaner fuel. The technology could also be used in existing biodiesel plants without major equipment changes.
Catilin's nanospheres are solid, which makes them easier to handle. They can also be recovered from the chemical mixture and recycled.