The strong demand for diesel fuel is producing a surplus of gasoline fractions in Europe. Despite new vehicles using less energy, the rising volume of traffic will lead to more diesel being consumed. European legislation demands that renewable fuels cover 10% of energy consumed in the transport sector. The present strategy of dividing biofuels in equal shares between diesel and gasoline does not help to improve this situation. It seems reasonable not only to add FAME but also ethanol to diesel.Unfortunately, fuel blends containing ethanol cannot be used in existing cars without hardware modifications. This is because of ethanol's characteristics and well-known from the experience gathered with gasoline cars. As such, the first part of this study investigates material compatibility, focusing on corrosion and changes to the mechanical properties of the materials used in diesel engines. Alongside tests for material compatibility with ethanol-RME blends, it also includes a comparison of RME and SME fuels. This first part concludes by explaining the modifications necessary to fuel lines and fuel-tank systems to make them safe for use with diesel-FAME-ethanol blends.In a second part, investigation characterizes the properties of the selected RME-ethanol-diesel blend, showing its potential in a single-cylinder research engine. It evaluates five operating points representative of the engine map. The aim is to assess changes in engine operation in a EU5 combustion system and define the recalibration measures needed to meet base-line performance. One aspect of investigating recalibration is to find out whether the better soot levels gained with oxygenated fuels can be translated into attaining lower NOx emission in line with the EU6 emission target.