The present study was primarily aimed at reviewing recent studies on biodiesel production as well as the application of various biodiesel additives including their life cycle assessment studies. More specifically, major factors affecting engine performance and emission characteristics of diesel engines fueled with biodiesel were highlighted and discussed. Accordingly, when using biodiesel, variations in fuel properties (e.g., feedstock, blend percentage, density, cetane number, viscosity, transesterification route, etc.), engine characteristics, as well as the operating conditions (e.g., load percentage, driving cycles, etc.) could significantly change engine performance and emission properties. Moreover, the application of different additives used for improving the combustion process including antioxidant additives, oxygenated additives, cold flow improver additives, metallic- and non-metallic based additives, water, and polymeric-based additives, was investigated. In the subsequent section, life cycle assessment (LCA) studies conducted on biodiesel and biodiesel additives were explored. Finally, since no study was reported on the LCA of polymeric wastes as fuel additives, the environmental burdens of expanded polystyrene (EPS) dissolution in waste cooking oil (WCO) biodiesel were also scrutinized herein and consequently the best scenario for sustainable EPS-WCO biodiesel consumption was proposed.