Hard to say, I've read a lot about biodiesel, not much about ethanol.

I think the main challenge with ethanol is getting the last of the water out of it - it can't be done by simple distillation.

On the other hand, biodiesel requires methanol to manufacture. You can scavenge the excess at the end of the process, but you do consume most of it.

On the other, other hand, a diesel can also be modified to burn straight vegitable oil. Not sure you'd want to do that to a brand new vehicle.