Abstract: The process described in the instant invention has the steps of dissolving the lipid-containing biomass in an ionic liquid, whereby a lipid phase and a hydrophilic phase are formed. The lipid phase contains primarily triglycerides, which can be converted to biodiesel by transesterification to, e.g., methyl esters. The hydrophilic phase comprises dissolved biopolymers, such as cellulose, hemicellulose, and protein. The biopolymers are converted in situ to compounds that are insoluble in the molten inorganic salt hydrate. The molten inorganic salt hydrates regenerated by removing insolubles, such as lignin, ash from the biomass, and water.