Experts say it takes about 5-7 kg of coffee grounds to get one liter of biofuel, which with a medium-sized production would yield a cost of about $1 per gallon. Plus, it’s already used: you can just walk around to your local coffeeshops and convenience stores and stock up the same way you would on vegetable oil.
Creating fuel from the grounds uses the same procedure as other biodiesels, transesterification, which is sort of complicated to explain but fairly inexpensive. The US estimates we consume over 7 tons of coffee each year, which would yield about 340 million gallons of biodiesel.
For perspective, that’s about 3 days of US on-road diesel consumption. But at a buck a gallon, without displacing food crops and with removing not-particularly-friendly gunk from the usual waste stream, why the heck not? Oh, and it’s about five times current total US biodiesel output.