The first and most important advantage of MHF is that it is generally cheaper than biodiesel and has the potential to be cheaper than diesel fuel. Two factors have significant impact on the price of biodiesel: first, the price of the raw material, which is plant oil; and second, the prices of the chemicals used in the processing such as methanol and caustic soda. For example, the price of coconut oil, which is the raw material used to produce coconut methyl ester (CME), is generally higher than the price of diesel fuel. If the cost of chemicals and processing is added, then the price of the biodiesel product becomes even higher than diesel. For this reason, only a small percentage of biodiesel (1%-2%) can be blended with diesel without significantly increasing the price of the blended biodiesel, B1 or B2. It is expected, however, that jatropha oil – once more areas are planted to the crop – will become available at a price lower than or comparable to that of diesel fuel. Since no significant amounts of other chemicals such as methanol and caustic soda are needed in the production of MHF from jatropha oil, it is expected that jatropha MHF would be lower in price compared to biodiesel such as CME.

The second advantage of MHF is its higher heating value compared to the equivalent methyl ester. The transesterification of plant oil to produce its methyl ester basically involves the removal of glycerin from the chemical structure of the oil. While this results in a significant reduction in viscosity, it also reduces the heating value of the resulting methyl ester compared to the original plant oil (basically due to the removal of glycerin). On the other hand, no chemical reaction takes place in the production of MHF and the heating value of the product MHF is the same as the heating value of the raw material plant oil.

The third advantage of MHF is that its production requires a much simpler processing. The production of MHF involves the simple physical process of microemulsification. On the other hand, transesterification involves complex chemical processing with the use of chemicals such as methanol and catalysts such as sodium hydroxide. In many cases, these chemicals have to be imported, thus somewhat negating one of the very purposes of using alternative fuels, which is conservation of foreign exchange. In particular, the amount of methanol needed in the transesterification of plant oils is quite considerable amounting to one liter of methanol for every 4-5 liters of plant oil.

The fourth advantage of MHF is that there is no residual waste product to be disposed of or treated. The transesterification of plant oil produces crude glycerin, waste oil and crude recovered sodium hydroxide. If the crude glycerin cannot be sold to other users (which is generally the case), then it must be properly disposed of or treated prior to disposal. Otherwise, it will cause serious water pollution problem. In most cases, crude glycerin is further processed to produce chemical-grade glycerin. This increases the initial investment required for the processing equipment and facilities.

The fifth advantage of MHF is that it is a generally cleaner fuel. For example, if 50% palm oil or jatropha oil is microemulsified and blended with diesel fuel (MHF50), then 50% of the fuel is carbon neutral and does not add up to the problem of carbon dioxide and climate change. On the other hand, a mere 1% or 2% biodiesel has a very small contribution to reducing carbon dioxide emission and preventing climate change since 98% to 99% of biodiesel is still comprised of fossil fuel. In addition, the emission of sulfur oxides is greatly minimized with the use of MHF since plant oil does not contain any sulfur, unlike fossil fuels.