Bio diesel is kind of "suspect" of being a carcigen, so be careful when exposing students to the exhaust fumes.
Like stated already, for lab purposes our model engines would not be well suited, because they lack direct fuel injection.
It would be a nice project by itself to convert an engine to get it to run with direct injection. Expect to use compression ratios in the vicinity of 25:1.  Low exhaust and scavenge timing engines should do the trick if fuel pump and injector can be made.