Biodiesel is a renewable fuel produced from vegetable oils and animal fats. It is generated via acid and/or base catalyzed transesterification, depending on the free fatty acid content in the feedstocks. The main reaction by-product of the biodiesel production process is glycerine. Removal of glycerine and other impurities from biodiesel is conventionally achieved using a water-washing step. The main objective of this study is to recover the organic compounds present in the effluent water from this step using bioadsorbents, which once spent, can be digested anaerobicall. The methane generated could be used as a renewable energy source within the biodiesel production process. The paper will present results on the adsorption capacity of glycerine and lipids (adsorbates) onto kenaf fibers (bioadsorbent), and methane generation. The kenaf surface was modified via several washing and oxidation strategies to enhance adsorption capacity. After application of the washing or oxidation techniques, the resulting kenaf material was dried at 80o C for at least 24 hours. Adsorption isotherms (Freundlich Model) were prepared to measure adsorption capacity on the treated and untreated kenafs. A pilot system was operated to treat water from a biodiesel production facility. The spent kenaf was digested to reduce its volume and produce methane.