Environmental problems related to the impact of transport on the quality of air have been clearly identified and are a growing concern for policy-makers. The reduction of the emission of nitrogen oxides, smokes and particulate matters is an important issue for public health, and many governments are ready to provide tax incentives to reach the targets set by the Kyoto protocol. Research results at the laboratory and pilot scales have led to the preparation of a water-diesel emulsion, stable under storage and diesel engine operating conditions. This fuel could be used by the urban captive fleet, such as buses and city trucks, but also on the railroad and marine transportation, etc. The innovative aspect of this unique fuel is that its combustion leads to a drastic reduction in the major pollutants produced by the urban captive fleet under real driving conditions, particularly nitrogen oxides, smokes and particulate matters.