HAHAHAHA, you americans and your cheap fuel didn't know that in old Europe diesel have been used for decades. My Audi A4 is a turbo diesel, reach 120 mph and have a better efficiency than my CB750.
The problem with bio diesel is the amount of land needed to produce a decent quantity. Regarding the pollution, it's no issue as the carbon dioxide generated is compensated with the carbon dioxide consumed by the plants when growing. That could be a future for developing countries....
A diesel bike is good from the point of view of economy, but don't expect acceleration from it. It makes no sense in our developed world, where the motorcycle has become a leisure vehicle, a commodity, and not a basic means of transportation. And using it for commuting is no excuse, as chances are that the people who commute by bike can choose between car or bike. I mean when the bike is the only mean of transportation for a whole family, like in Asia.
The good thing about diesel engines is that it doesn't take too much for them to run on almost anything, including used oil from the kitchen. Naturally, you don't want to use olive oil, that is about 16 euros a gallon lately...
Raul