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In addition to the answer @Yetisasquatch gave, chemicals used in the making of soap are also used to make the explosives that go off in the credit card companies at the end of the movie. The fact that they use human fat is also relevant because Tyler Durden's philosophy in the film revolves somewhat around the disdain for gluttony and people going through ...
Well it's not hidden. Yep he made soap ..... out of human fat or blubber if remember a few funny scenes. There's a scene where they have a bag of human blubber! It adds probably a great creep factor to the character IMO. Article on this subject.
This is pure speculation, but at this point of the film, Jack (the narrator) is going through an identity crisis. Or that is, he no longer recognizes who his alter ego is. When he first meets Tyler, Tyler is an ideal version of himself, hence the similar looks and everything. But as the plot trudges on, Tyler has a complete change in personality. Tyler has ...
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