Diesel engine smoke is caused by incomplete combustion. White smoke is caused by tiny droplets of unburned fuel resulting from engine misfiring at low temperature. This smoke should disappear as the engine warms up. Black smoke could be caused by a faulty injector, insufficient air, and overloading and/or over-fueling the engine. Blue-gray smoke is the result of burning lubricating oil and is an indication the engine is in poor mechanical condition.