The utilization of waste cooking oil to produce biodiesel is critical for advancing towards carbon neutrality. This study examines the production of first- and second-generation biodiesel from waste cooking oil, highlighting the transition from first-generation biodiesel, which achieved high purity and yield, to second-generation biodiesel through a hydrodeoxygenation-hydroisomerisation process. The first-generation process demonstrated high efficiency, with a biodiesel purity of 97.8 wt% and a yield of 99.88 wt%. However, the need for more sustainable and higher-quality fuel led to the development of a second-generation process, which, despite lower yield (69.06 wt%), produced biodiesel with 99.99 wt% purity. The energy optimization strategies employed showed a potential of 18.92% energy saving for reducing production costs and enhancing economic feasibility. This research underscores the importance of improving energy efficiency and cost-effectiveness in biodiesel production, particularly in transitioning from first- to second-generation biodiesel, which is crucial for meeting environmental and economic goals.