The Pacific Island Countries including the Fiji Islands are heavily dependent on imported petroleum fuels for their energy needs. This is a major cause of environmental vulnerability as well as economic vulnerability due to high and volatile crude oil prices. A combination of Demand Side Management (DSM) to reduce energy consumption and optimize usage, and Renewable Energy Technologies (RET) to substitute fossil fuels can reduce their vulnerability. DSM consists of Smart Grids, Energy Efficiency and Storage, while RETs substitute fossil fuels by harnessing solar, wind, small hydro, biomass, geothermal and ocean energies. Comparative costs of electricity from RETs show that most of them are cheaper than the typical price of electricity in Pacific island countries. Nearly half of Fiji’s electricity is generated using petroleum fuels that can be substituted by biodiesel produced from locally grown coconuts. To evaluate the sustainability of coconut biodiesel, two different Environmental Accounting methods have been used: i) Emergy Analysis, and ii) Embodied Energy Analysis. Emergy Analysis is a holistic methodology that integrates all major inputs from the human economy and those coming ‘free’ from the environment, to evaluate complex systems. Emergy Performance Indicators for coconut biodiesel are: i) Emergy Yield Ratio is 1.32 indicating a low ability to exploit local resources efficiently; ii) Environmental Loading Ratio is 8.57 implying that biodiesel production causes significant environmental or ecosystem stress; and iii) Emergy Index of Sustainability is 0.15 indicating a low contribution to the economy per unit of environmental loading and a very high degree of environmental stress per unit of Emergy yield. Embodied Energy Analysis is a complimentary methodology that accounts for only the commercial energy (in kgs oil equivalent) required directly or indirectly to provide all the inputs (goods and services) for the entire biodiesel production process. Embodied Energy Performance Indicators are: i) Energy Return on Energy Invested is 2.47 which means that it is not worth the effort in energetic terms; and ii) Carbon dioxide Emissions during the production of coconut biodiesel is 1.38 kg CO2 per kg biodiesel showing that biodiesel is not climate neutral. This thesis adds to the growing body of knowledge that uses Emergy Analysis to evaluate sustainability of biofuels and other renewable energy options in a holistic manner. This is the first time in reported literature that Emergy Analysis has been used to determine the sustainability of coconut biodiesel. The Emergy and Embodied Energy performance indicators clearly show that coconut biodiesel is not a sustainable alternate source of energy for the Fiji Islands.