TECHNOLOGY FOCUS - CHEMICAL ENGINEERING - Preferred Process: The fish are e.g. anchovies, sprats or smelt. Processing the fish comprises catching them, mechanically processing them to produce biomass, producing fish oil by pressing, enzymatic hydrolysis in the presence of a protease to initiate decomposition of the biomass, and filtration to recover lipids. The biomass is produced by hanging the fish for 30-60 minutes and then placing them in a press under a pressure of 2-3 atmospheres for 15-30 minutes. The fish oil is expressed under a pressure of 5-10 atmospheres. Enzymatic hydrolysis is effected at 50-60 degrees C for 30-40 minutes. The algae are e.g. brown or red seaweeds. Processing the algae comprises harvesting them, air-drying them, comminuting them, preferably to a particle size of 5-15 cm, and subjecting the resulting biomass to chemical and enzymatic hydrolysis to initiate decomposition of the biomass, followed by filtration, drying and lipid recovery. The comminuted algae are steeped in water in a ratio of 1:5 for 2 hours. Chemical hydrolysis is effected with hydrogen peroxide at 50-60 degrees C for 30-60 minutes. Enzymatic hydrolysis is effected with a mixture of cellulase, hemicellulase and pectinase enzymes at 45-50 degrees C for 2 hours. Chemical and enzymatic hydrolysis are effected sequentially in a multi-section drum-type reactor. Transesterification is effected with a 25-35% solution of potassium methoxide in methanol or a 25-30% solution of sodium methoxide in methanol, which is added to the lipid fraction in a ratio of 0.1:1. Transesterification is effected at 60-70 degrees C for 30-60 minutes. EXAMPLE - Air-dried kelp (Laminaria japonica) was placed in a 500 ml flask and treated with a 1% hydrogen peroxide solution in a ratio of 1:3 for 30-40 minutes. The biomass was filtered, washed with water, placed back in the flask and treated with a solution of hemicellulase, cellulase and pectinase in a ratio of 1:0.5. The mixture was adjusted to pH 5 and stirred ar 45-50 degrees C for 30 minutes. The biomass was filtered and dehydrated by washing with ethanol in a ratio of 1:5. The biomass was transferred to the cylinder of a press, in which a lipid-containing phase was mechanically expressed. This was transferred to a separating funnel to separate a lower lipid phase from an aqueous phase. The lipid phase was stirred with a 25% solution of potassium methoxide in methanol at 60 degrees C for 45-60 minutes, giving an upper phase comprising fatty acid alkyl esters (biodiesel) and methanol, which was separated from a lower phase comprising glycerol. The upper phase was distilled to remove methanol, giving a 65-70% yield of biodiesel at a cost of 0.3 cents per liter.