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Biodiesel is considered a clean fuel because it is nontoxic, biodegradable, and much less polluting than petroleum diesel. The use of biodiesel fuel results in much lower emissions of almost every pollutant: carbon dioxide, sulfur dioxide (one of the main causes of acid rain), particulates, carbon monoxide, air toxins and unburned hydrocarbons. Biodiesel is in demand for specialized uses where its air emission characteristics are a major advantage, such as in school and city buses, marine craft, and diesel engines operating in enclosed areas, such as mines.

Biodiesel fuel meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency (EPA) under the Clean Air Act, and it is the first alternative fuel to have a complete evaluation of emission results and potential health effects submitted to the EPA. The analysis, A Comprehensive Analysis of Biodiesel Impacts on Exhaust Emissions, reports that biodiesel significantly reduces emissions of particulate matter, carbon monoxide and hydrocarbons over petroleum diesel, based on its use in heavy duty diesel engines.

Because biodiesel fuel is vegetable oil based, gaseous and particulate emissions are reduced with its use in that vegetation is part of the natural cycle of carbon dioxide assimilation by plants for their growth and development. For this reason, the use of biodiesel fuel could result in a zero net gain in oxides of carbon emissions.

Biodiesel and NOx (smog)

NOx
NOx is the generic term for a group of highly reactive gases, all of which contain nitrogen and oxygen in varying amounts. Many nitrogen oxides are colorless and odorless. One common pollutant, however, nitrogen dioxide (NO2), often is seen as a reddish-brown smog layer over urban areas. The main component of smog is ground-level ozone which is produced by a reaction between nitrogen oxides (NOx) and volatile organic compounds (VOC) in the atmosphere. Nitrogen oxides form when fuel is burned at high temperatures. The primary manmade sources of NOX are motor vehicles, electric utilities and other industrial, commercial and residential sources that burn fuels.

Mixed Reports
According to the U.S. Department of Energy, approximately 11 percent of the weight of B100 is oxygen. This is a plus for biodiesel because oxygen improves combustion, causing a reduction in air toxins, carbon monoxide, soot, small particles, and hydrocarbon emissions by 50% or more. Additionally, according to the DOE, it reduces the cancer-risk contribution of diesel up to 90% with pure biodiesel. Air quality benefits are roughly proportional for diesel/biodiesel mixtures. On the flip side though, oxygenated fuels also tend to increase NOx emissions.

Because the various studies performed to determine whether or not biodiesel raises NOx emission levels produced mixed reports, both the EPA and the National Renewable Energy Laboratory (NREL) conduced comprehensive studies to determine if B20 raises NOx levels. Tests by NREL and other groups found that biodiesel did not contribute to higher NOx emissions. A 2006 NREL study stated, "we conclude that B20 has no net impact on NOx."

Texas Low Emission Diesel (TxLED) Program

Because NOx is a serious problem in certain areas of Texas, the Texas Commission on Environmental Quality (TCEQ) created the TxLED (Texas Low Emission Diesel) Program to regulate diesel fuel NOx and VOC levels. 110 counties and several major cities are covered under TxLED, including Austin, Dallas, Houston and San Antonio. Pure biodiesel (B100) is not regulated by TxLED because it is not defined by TxLED as a diesel fuel. However, most biodiesel is sold as B20, and because B20 is a blend of 80% diesel and only 20% pure biodiesel, it does meet the TxLED definition of diesel fuel, which is regulated by TxLED.

TXLED is paying close attention to the EPA/NREL study. TCEQ had considered banning sales of B20 in several major Texas cities because of concerns that it would raise NOx and VOC levels; however in January 2007, the Commission agreed to wait for the EPA/NREL study due out at the end of 2007 before making a ruling on whether to ban or to allow the biodiesel mix. On December 21, 2007, TCEQ and the EPA announced that B5 meets the TxLED emission standards and can be used in diesel vehicles. As of yet, however, TCEQ has not approved the use of B20 blends unless specific chemical additives are included in the fuel. This may affect the biodiesel market and the sale of biodiesel in Texas even if feedstock cost issues, the biggest hurdle facing this fuel, are resolved.

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