The present invention relates to a method of producing fatty acid alkyl ester from an organic oil source containing at least one free fatty acid, wherein the oil source has an acid number of at least 30 mg KOH/g oil source and wherein the method comprises the steps of a) reacting the oil source with glycerol at a temperature, which does not exceed 180° C. during the reaction, in the presence of a catalyst comprising at least one alkyl or aryl sulfonic acid or an homoanhydride thereof; and b) transesterification of the reaction product from step a) with an alkanol; and c) isolating the fatty acid alkyl ester from the reaction product of step b).