Why does the engine even have to be re-invented? There are plenty, in fact all ICE's, that will run on alcohol with some modifications and duel fuel vehicles on the market today that need nothing other than a reliable source of supply. And the necessary biomass can be grown on untillable land.
http://en.wikipedia.org/wiki/Alcohol_fuel You will be waiting a long time for a diesel engine small enough for motor assist, if ever, and diesel bio fuel biomass is more apt to take up valuable tillable land, or in the case of palm oil the cutting of forests.