The present experimental investigation has shown the biodiesel production from 2nd generation renewable carbon source, Karanja seed oil using graphene oxide (GO) immobilized lipase biocatalyst. The adsorption of lipase in GO was found to be most suitable immobilizing support matrix (adsorbed ~94 mg/g of GO) due to large specific surface area and abundant functional groups. The GO immobilized enzyme i.e. biocatalysts assisted enzymatic transesterification yielded ~88% of biodiesel using 1:8 Karanja oil: ethanol ratio, 25 °C, 3% biocatalysts in 24 h reaction time. The newly designed solar-driven direct contact membrane distillation module enables continuous separation and recycles of unreacted alcohol (>99% recovery) from transesterification reaction mixture while yielding ~41 Kg EtOH/m2/24h using commercial PTFE/PET hydrophobic membrane. Subsequently, free glycerol was removed up to ~77% (permeate concentration ≤0.018 mass%) by cross-flow membrane module fitted with flat-sheet polyethersulfone ultrafiltration membrane. The integration of GO-based biocatalyst assisted transesterification and multi-staged membrane system for downstream enrichment of fatty acid ethyl ester culminates in the development of a cost-effective, energy-intensive and eco-friendly system which represents a sustainable biofuel production process.