Combustion of fuel produces energy, water, carbon dioxide, sulphur dioxide and NOx gases. Due to the greenhouse gas emssion, biodiesel is increasingly being used as an alternative fuel for compression ignition diesel engines. The theoretical tailpipe CO2 emission could be determined by the carbon content of the fuel. Calculation shows that palm biodiesel could theoretically reduce the tailpipe CO2 emission by about 7% as compared to fossil diesel.