Fact checkers, can you verify something that has been nagging me since watching the Live Earth concert?

The bands were hyping that their buses now run on biodiesel and that would reduce their carbon foot print.

While I think it is great to get away from oil to something renewable, does biodiesel actually reduce CO2 emissions? Given the smoke I see coming from most diesels(bio or otherwise) I always figured diesel was just as much of a polluter at gas.