First things first:
Definition of a Co-op (link to Wikipedia article)
Essentially, a cooperative or "co-op" is a legal entity, designed around some sort of social or business goal. Co-ops can be be for-profit or non-profit, but are necessarily a democratically organized group of people working cooperatively to arrive at a goal that would be more difficult alone. In this case, we are organized around the idea that it's much easier and more rewarding if we all work together to create biodiesel, instead of each of us finding our own plans, buying materials, building our own reactors, and collecting our own oil.