Perhaps you are thinking of the McGyan Process that continuously converts various lipid feedstocks such as old cooking oil, tallow, or algae into biodiesel. The process also requires alcohol as a feedstock. It does not process cellulose waste.
Most ethanol to cellulose processes require the cellulose to be first broken down by acid. There are also catalysts for converting cellulose under development in the lab, but the wood waste, switch grass, or whatever source of cellulose they are trying requires a lot of grinding and pulping before they can get started.
The Zymetis process for cellulostic ethanol appears that it could make a good complement to the McGyan process for biodiesel.
...Because you can't handle the truth, that's why! (Jack Nicolson mode off)
(Seriously) Biodiesel is an ester, which means it has a lipid (oily) part and an alcohol part. The algae or jatropha supply the lipid, the alcohol is still required.
Ask anyone who has made their own biodiesel - although they use old french-fry oil, they are also mixing it with methanol (if you want to do the reaction at room temp, the ethanol reaction requires heat) and lye.
This is dejavu all over again - Donovan had a song about this in 1973 called "the Intergalactic Laxative". Have a listen to it on YouTube: http://www.youtube.com/watch?v=0u846w66zTQ