Diesel fuel polishing is the process by which emulsified water is removed from diesel fuel in storage tanks in order to maintain the integrity of the fuel. For many years water was unable to emulsify in stored diesel fuel and there was no need for diesel polishing. Recently the content of diesel fuel has changed, making it susceptible to water absorption. Government regulations mandated a reduction in sulfur content in diesel fuel in order to reduce its negative impact on the environment. However, the process used to remove sulfur from diesel affects the functionality of the fuel. Additives such as lubricants, de-icers, and biodiesel are included to prevent the fuel’s functionality from being compromised, but these additives can also increase the fuel’s ability to absorb water.

Water in diesel fuel causes many problems and can cause diesel generators to fail. This is especially problematic in data centers, where standby generators are often run on diesel fuel. If the generators don’t kick in, the data center goes down. In 2012, organizations lost an average of $138,000 for every hour a data center was down. This underscores the importance of proper fuel management at data centers.

A comprehensive approach must be taken for fuel management at data centers. A fuel management protocol should include regular onsite and offsite testing to monitor any contamination of diesel fuel, and system evaluation to determine any areas where site temperature and humidity ranges could lead to water condensation and emulsification in diesel storage tanks. If this is an issue, an automated diesel fuel polishing system that uses coalescing filters will remove emulsified water and maintain the integrity of the fuel and of the backup power generator.

Source
http://www.datacenterknowledge.com/archives/2013/10/03/diesel-fuel-its-critical-for-standby-power/