This invention shows how to make and use a biodiesel-based fuel in diesel engines without incurring the NO.sub.x penalty. Embodiments primarily relate to an optimum range of bulk modulus of compressibility for biodiesel blends, which results in generating "NO.sub.x neutral" biodiesel blends or to formulate biodiesel blends with lower NOx emissions than conventional petroleum diesel fuel. These biodiesel blends preferably comprise synthetic paraffinic middle distillate derived from a hydrocarbon synthesis to generate synthetic environmentally-friendly diesel fuels.
 This invention was made with United States Government support under Cooperative Agreement DE-FC26-01NT41098 awarded by the U.S. Department of Energy and entitled "Development & Evaluation of New Processes for the Production of Ultra Clean Fuels from Natural Gas". The United States Government has certain rights in the invention.