The properties and use of biodiesel as a renewable fuel as well as the problems associated with its current production processes are outlined. A novel sustainable esterification process based on catalytic reactive distillation is proposed. The pros and cons of manufacturing biodiesel via fatty acid esterification using metal oxide solid acid catalysts are investigated. Finding catalysts that are active, selective, and stable under the process conditions is the main challenge for a successful design. The best candidates are metal oxides such as niobic acid, sulfated zirconia, sulfated titania, and sulfated tin oxide. Rigorous process simulations show that combining metal oxide catalysts with reactive distillation technology is a feasible and advantageous solution for biodiesel production.