In the case of biodiesel, it actually produces more NOx than diesel. While other pollutants are often reduced, this is the major one that forms that orange cloud over heavily polluted cities. NOx is a major pollutant of diesel engines due to the high compression ratios and still has not been effectively solved. While particulate matter is less than diesel, it is still significant, far more than gasoline. While technologies exist to reduce NOx, they are sensitive to sulfur, and while sulfur is virtually eliminated from biodiesel, it would mean that an engine designed to run on it could not use regular diesel without destroying the NOx smog equipment.
So you mean we would need regular diesel with less sulfer in it for biodiesel to work?
You basicly said exactly what is happening to US diesel fuel right now. Its transitioning from "Low sulfer diesel" at 500 PPM sulfer content to "Ultra low sulfur diesel" with 15 PPM sulfur content. If you look at diesel pumps right now they all have signs on them saying that the fuel is not to be used in model year 2007 vehicles because those vehicles require the Ultra Low sulfur diesel. Ultra Low sulfur will be available in something like 80% of retail outlets come September.
