A method of forming a biodiesel product and a heterogeneous catalyst system used to form said product that has a high tolerance for the presence of water and free fatty acids (FFA) in the oil feedstock is disclosed. This catalyst system may simultaneously catalyze both the esterification of FAA and the transesterification of triglycerides present in the oil feedstock. The catalyst system according to one aspect of the present disclosure represents a class of zinc and lanthanum oxide heterogeneous catalysts that include different ratios of zinc oxide to lanthanum oxides (Zn:La ratio) ranging from about 10:0 to 0:10. The Zn:La ratio in the catalyst is believed to have an effect on the number and reactivity of Lewis acid and base sites, as well as the transesterification of glycerides, the esterification of fatty acids, and the hydrolysis of glycerides and biodiesel.