The term “biodiesel” as used by the common person refers to a percentage of biodiesel methyl ester mixed into regular #2 diesel fuel. These biodiesel fuels are popular because they have great environmental benefits in the form of lower emissions of toxic urban pollutants. This is why government fleets and fleet companies seeking to be "greener" are mandating biodiesel’s inclusion in their fuel supplies.
To be sure, biodiesel's environmental advantages are well established. Not only does it lower urban air pollution, but since it is produced from domestically-made renewable feed stocks (from animal fats and vegetable oils that can be considered 'renewable resources'), it appears to be one way we can cut into our use of imported oil. Or at least that’s the marketing line.
It took a long time for biodiesel to establish itself in the marketplace to the extent that it currently is. The 2005 federal tax credit enabling users to claim $1 per gallon tax credit off of fuel taxes was a big reason why the demand for and production of biodiesel skyrocketed around that time. Now that the novelty is wearing off (and the tax credit may or may not be going away, depending on the mood of the Congress), both the big users of biodiesel (municipalities, corporate fleets) and the small ones (individual truckers and diesel users) are having to balance the "eccentricities" of the biodiesel blends with the need to maintain health of their financial bottom lines and the health of their equipment in these increasingly tough economic times.
By "eccentricities", we really mean the downsides of biodiesel - the problems caused by the biodiesel fuel related to its properties or effects in the engine. Sure, it's great for the environment, but it's not a perfect fuel.
Pure biodiesel has less energy value than #2 diesel fuel, so that means less fuel mileage. For corporate fleets and large companies with tight budgets, this is bad news.
High volume users (such as corporate fleets) also see problems with biodiesel in storage - water in the fuel, microbial growth and a general lowering of biodiesel storage life. Biodiesel has the same problems that diesel fuel has with water condensing from the air into vented storage tanks. Once water accumulates in the fuel, you can have accelerated oxidative breakdown (lowering the fuel quality) and you have the perfect environment for microbes like bacteria and fungus to grow and flourish in the tank. This leads to plugged filters and serious tank corrosion, neither of which is good situations for biodiesel users. Especially those users with large numbers of vehicles that have to start and run right all day, every day, every time.
If you're just an individual biodiesel user, does this mean these issues will pass you by? Not necessarily. While the storage problems will depend on the handling practices of where you get your biodiesel fuel, you still have to deal with lower mileage.
Not only that, if you're up north, you have to worry about fuel gelling in the winter. Traditional cold flow improvers for regular diesel fuel don't work as well in biodiesel blends, because the bio- part of the fuel gels differently than traditional diesel fuel does. In practice, this means your biodiesel blend will start to give you cold handling problems at higher temperatures than before, when you were using just regular #2 diesel fuel. The temperature at which your biodiesel blend gels has everything to do with the type of fat it is made from.