In this study, low-quality rapeseed was used as a raw material for biodiesel fuel production. The application of such seeds with an enzyme catalyst is a green approach to producing renewable biodiesel fuel. During the in situ transesterification process, mineral diesel was selected as an extraction solvent for the simultaneous extraction and transesterification of rapeseed oil (RO). This allowed, at the end of the process, for the production of a mixture of mineral diesel and biodiesel fuel. Energy is saved using this process, as the need to extract the oil separately is eliminated and extraction and transesterification take place together in the in situ process. In this study, 11 different lipases were analyzed from which to select the most effective biocatalyst according to the chosen experimental conditions. The most suitable lipase for in situ transesterification was Lipozyme TL IM (Thermomyces lanuginosus). The impact of the temperature and duration of the reaction was investigated along with the concentration of the lipase. A ethanol-to-oil molar ratio of 5:1 was chosen. The optimal reaction conditions were as follows: a reaction duration of 7 h, a reaction temperature of 30 °C and a lipase concentration of 5% (based on oil weight). Under these conditions, 99.92% of oil was extracted from the rapeseed. The degree of oil transesterification acquired was 99.89%. A mineral diesel and rapeseed oil ethyl ester blend of 9:1 (w/w) was produced.