Until now few studies have been carried out on the use of biodiesel fuel refined from used cooking oil (hereafter BDF) as motor car fuel. Most of these studies adopted an empirical approach to study BDF generated from used cooking oil. The used oil was usually collected and recycled by various municipalities and civilian organizations. However, no study has been carried out to evaluate the impacts of the use of BDF on the environment as well as on the overall profit system. In this study, the amount of CO₂ reduced through use of BDF for one year from April 2005 to March 2006 in Ibaraki Prefecture (the study area) was calculated. Moreover, the rate of mixing BDF with light oil for use, and distribution and promotion in Ibaraki Prefecture was considered. In addition, the amount of used cooking oil thrown down the drain during the year was calculated by obtaining information on the amount of used cooking oil processed in the sewage system from the Ibaraki Prefecture authorities. The reduction in CO₂ emission from using BDF was also calculated. Finally, the social costs of the quantity of CO₂ emissions were evaluated from the price of CO₂-t in the emissions. Results of this research, show that the amount of used cooking oil generated in Ibaraki Prefecture from April 2005 to March 2006 was 7,811.1 t (8.67 million liters) from which 7 million 803 thousand liters of BDF was produced. Moreover, a mixture of 1% BDF with light oil consumed during 2005 and 2006 reduced CO₂ emissions by 19,500 tons. JFL Classification: C80, Q20, Q28, Q25