Abstract The continuous biodiesel production process under sub- and supercritical conditions using a trace amount of potassium hydroxide (KOH) as a catalyst has been studied. CO2 was added as a co-solvent to reduce the reaction time and increase biodiesel yield. The proposed procedure enables simultaneous transesterification and esterification of triglycerides and free fatty acid (FFA), respectively. The shorter reaction time and milder reaction conditions may reduce energy consumption due to the simplification of the separation and purification steps. The process variables, including reaction temperature, ethanol to oil molar ratio, catalyst amount, and process pressure, were systematically optimized. The highest biodiesel yield (98.12%) was obtained after a 25-min reaction time using only 0.11% wt. of KOH and a 20:1 ethanol to oil ratio. The process optimum temperature and pressure were 240 °C and 120 bar, respectively. The proposed kinetic model suggested a first-order reaction with an activation energy of 15.7 kJ·mol−1 and a reaction rate constant of 0.0398/min−1. The thermodynamic parameters such as Gibbs free energy, enthalpy, and entropy were calculated as 144.82 kJ·mol−1, 11.4 kJ·mol−1, −0.26 kJ·mol−1 and at 240 °C, respectively.