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Diesel engines dominate in Heavy-Duty applications due to its better fuel economy, higher durability and larger reliability. Fuels derived from petroleum resources are depleting daily and it’s become a scarce resource for future generation to come. With growing environmental consciousness of the adverse implications brought by excessive usage of fossil fuels, the battle for finding alternative fuels as their substitution is getting heated up. At present, renewable energy from bio-fuels has been peddled as one of the most promising substitution for petroleum derived diesel. Using bio-ethanol blended diesel fuel for automobile can significantly reduce diesel usage and exhaust greenhouse gases. Bio-ethanol can be produced by alcoholic fermentation of sucrose or simple sugars. The main drawback is that ethanol is immiscible with diesel fuel over a wide range of temperatures, and the hygroscopic nature of ethanol leading to phase separation in blend.