The interest in biodiesel as an alternative transportation fuel stems mainly from its renewable, domestic production, its safe, clean-burning properties, and its compatibility with existing diesel engines. Biodiesel can be blended with petroleum diesel in any percentage. The percentages are designated as B1 for a blend containing 1% biodiesel and 99% petroleum diesel, B20 for a blend containing 20% biodiesel and 80% petroleum diesel, B100 for 100% biodiesel, and so forth. When biodiesel is blended with petroleum diesel, it produces a fuel that is compatible with diesel engines, displaces imported petroleum, and reduces harmful emissions. Even the use of as little as 0.25% biodiesel, which is very low in sulfur, can significantly increase fuel lubricity. Thus blends like B2 and B5 are becoming increasingly popular for this reason. In the Philippines, the use of B1 and B2 is mandated by legislation. The most acceptable biodiesel blends are those in the range of B20 and below. The use of B20 and below provides substantial benefits associated with the use of biodiesel but avoids many of the cold-weather performance and material compatibility concerns associated with B100. B20 and lower-level blends can be used in nearly all diesel equipment, is compatible with most storage and distribution equipment, and generally do not require engine Modifications.

Biodiesel contains about 8% less energy per unit volume than petroleum diesel. For B20, this could mean a 1% to 2% difference, but most B20 users report no noticeable difference in performance or fuel economy. However, as biodiesel blend levels increase significantly beyond B20, a number of concerns come into play. Users must be aware of lower energy content per liter and potential issues with impact on engine warranties, low-temperature gelling, solvency/cleaning effect if regular diesel was previously used, and microbial contamination.

Compared with using petroleum diesel, using biodiesel in a conventional diesel engine substantially reduces emissions of unburned hydrocarbons (HC), carbon monoxide (CO), sulfates, polycyclic aromatic hydrocarbons, nitrated polycyclic aromatic hydrocarbons, and particulate matter (PM). The reductions increase as the amount of biodiesel blended into diesel fuel increases. B100 provides the best emission reductions, but lower-level blends also provide benefits. B20 has been shown to reduce PM emissions 10%, CO 11%, and unburned HC 21%, as shown in Figure 5.4. Using biodiesel also reduces greenhouse gas emissions because carbon dioxide released from biodiesel combustion is offset by the carbon dioxide sequestered while growing the soybeans or other feedstock. B100 use reduces carbon dioxide emissions by more than 75% compared with petroleum diesel. Using B20 reduces carbon dioxide emissions by 15%.

Biodiesel is nontoxic, so it causes far less damage than petroleum diesel if spilled or otherwise released to the environment. It is also safer than petroleum diesel because it is less combustible. The flashpoint for biodiesel is higher than 150°C, compared with about 52°C for petroleum diesel. Biodiesel is safe to handle, store, and transport. Biodiesel is a domestically produced, clean-burning, renewable substitute for petroleum diesel. Using biodiesel as a vehicle fuel increases energy security, improves public health and the environment, and provides safety benefits.