Closed-loop geothermal systems (CLGS) provide a renewable heat source for district heating and electricity production. However, high capital costs can be a barrier to these applications. This study finds that the high pressures (>8MPa) and temperatures (>240°C) attained by working fluid inside the loop present additional opportunities: driving supercritical reactions that produce biodiesel from fatty acids. A new design for a subsurface geothermal reactor is proposed, enabling biofuel processing underground without the need for conventional processing equipment (pump, heater, reactors, and heat exchangers) or fossil fuel as energy source. To analyze the feasibility of this approach and its environmental and economic effects, a computational model that incorporates the simultaneous effects of flow dynamics, heat transfer, and reaction kinetics is developed. The application of CLGS is concluded to reduce the CO2 intensity of the resulting biodiesel by up to 33%. A geothermal-driven biofuel reactor could yield up to 95% fatty acid methyl esters. Additional sensible heat carried by the products can be redirected to electricity generation or district heating. The relevant requirements and optimal operating conditions for this approach to biofuel synthesis are identified. A technoeconomic analysis shows CLGS-based biofuel production cost can be comparable to natural gas-based production (∼840 $/ton). It also indicates return-on-investment after five years and highlights the most suitable locations that combine proximity to appropriate feedstocks and subsurface conditions. Integrated biodiesel production and energy extraction provides an alternative route to harnessing geothermal energy.