A method is provided for operating a diesel engine with reduced emissions. The method comprises combusting a first biodiesel blend fuel in a diesel engine resulting in the production of diesel exhaust gases containing NOx. The diesel exhaust gases are admixed with a second biodiesel blend fuel, and the second biodiesel blend fuel is hydrolyzed to form reducing agents. The diesel exhaust gases containing NOx are passed through an NOx-reducing catalyst to reduce the NOx through a selective catalytic reduction reaction with the reducing agents. The invention further provides a method for operating a diesel engine with reduced emissions, comprising combusting a first biodiesel blend fuel in a diesel engine resulting in the production of diesel exhaust gases containing NOx. A second biodiesel blend fuel is converted in a fuel processor thereby forming reducing agents, and the diesel exhaust gases are admixed with the reducing agents. The diesel exhaust gases containing NOx are passed through an NOx-reducing catalyst to reduce the NOx through a selective catalytic reduction reaction with the reducing agents.