This study analyzes the potential environmental impacts and socioeconomic benefits of installing a pilot plant for biodiesel production from used cooking oil (UCO) collected from hotels, restaurants, and bars in the Copacabana district of Rio de Janeiro, Brazil. Currently much of this oil is used to produce soaps or simply disposed of directly into the sewage system, contributing to the eutrophication of bodies of water. An analysis is made of the production of biodiesel by the alkaline transesterification of UCO with ethanol using a sodium hydroxide catalyst. In order to analyze the environmental impacts, the ten stages of the life cycle of biodiesel made from UCO are assessed. The environmental impact of producing 1 metric ton of biodiesel is evaluated on the basis of the life cycle assessment (LCA) methodology. In order to assess the economic feasibility of the pilot plant, a cash flow deterministic method was employed to evaluate the investment required. The social performance of the project was assessed using Global Reporting Initiative (GRI) indicators. The environmental analysis showed that ethanol production and fuel combustion are the stages that had the highest environmental impact. The findings of the economic analysis showed that it would be feasible for the Rio de Janeiro city council to implement a pilot plant in the Copacabana district of the city. The results of the social performance analysis indicated that the project would have a positive impact on local job and income generation.