Biodiesel is normally produced through transesterification of triglycerides with methanol in the presence of an alkaline catalyst. With the uncertain crude oil prices and competition of vegetable oils used for food purposes, alternative feedstock for biodiesel production has to be studied. In this study, palm fatty acid distillate (PFAD), a by-product of the palm oil refinery was used as a feedstock. Glycerolysis reaction was carried out from 160 to 200 °C in the presence of a natural CaO catalyst derived from raw chicken eggshell. The commercial CaO was also evaluated as a control. The results showed that the free fatty acid (FFA) was reduced from 81 to 1.5% using activated eggshell as catalyst at reaction temperature of 180 °C and catalyst dosage of 1.5 wt% while commercial CaO reduced FFA to 3.7% at reaction temperature of 200 °C and 1.5 wt% of catalyst dosage, respectively. The treated PFAD can be used for biodiesel production.