It hopes the trial, using 10% of its 1,100-strong fleet, will allow it to demonstrate the environmental and economic viability of the fuel by reducing emissions from the fleet by about 20%.
The trial will start in April and an independent auditor will verify the effects of long-term biodiesel use.
During the second year of the trial, the agency will include 13 vehicles run by a private courier service, City Sprint, in a bid to show that a commercial transport company can run on the alternative fuel.
Environment Agency project manager Simon Dawes said: ‘By using a fuel that is partly non-fossil based in our essential operational vehicles, we are striving to meet the high standards we demand of ourselves to use less resources and produce less CO2.
Biodiesel contains vegetable oil sourced from crops or recycled from the food industry, which is then processed to allow blending with normal, ultra low sulphur diesel.
He added: ‘By using recycled waste vegetable oil in a 22% blend we can maximise the carbon saving from this fuel, helping us to achieve our aim of a 20% reduction in emissions.’
The 100 Environment Agency-badged vehicles, including Ford Transit, Transit Connects, Land Rovers and Vauxhall Combos, will be based in Llandarcy, Wales, Launceston, Cornwall and Sale in Manchester.
The agency’s partners, Natural England, British Waterways and Allied Bio Diesel Industries, will also trial the fuel in a selection of their vehicles during the programme’s second year.
Dawes said: ‘Extending the trial across these partner fleets will add credibility to the results, while running biodiesel in a commercial courier will demonstrate that this fuel is viable in a commercial situation.’
The trial will is also aimed at convincing car manufacturers that more than a 5% blend will not cause any damage to vehicles.
Last year, the Government signed up to an official target of nearly 6% of all fuel sold being biodiesel by 2010.