High production cost is the key issue of biodiesel industry nowadays. To decrease the cost, using low-quality lipids feedstock is the most effective way. For low-quality lipids with high content of free fatty acids, a simple and promising route is proposed to produce biodiesel. Instead of the typical two-step procedure, the esterification and transesterification processes are performed continuously by simultaneously eliminating the formed water in the reaction system with CaO powder. Investigations were carried out on the synthesis of fatty acid methyl ester and fatty acid ethyl ester. The results showed that the esterification rate reached to 99.6% for fatty acid methyl ester and 99.4% for fatty acid ethyl ester within 3–4 h, and the transesterification rate reached to 89.1 and 86.2%, respectively. Over 93 w% of feedstock oil could be transformed to biodiesel. Besides, hydrophobic CaCO₃ nanorods were also synthesized as value-added by-product. Based on the new route, the production process of biodiesel could be simplified and the production cost could be reduced.