One of the main reasons why the diesel engine blows white smoke out of the tailpipe is a bad injector, causing too much fuel to be injected into the combustion chamber. A clogged fuel filter, resulting in an unbalanced air/fuel ratio mix inside the combustion chamber, travels through the hot exhaust causing white smoke from the tailpipe, this will also cause misfires and a lack of power.A blown head gasket, transmission fluid leak through a damaged diaphragm. damaged valve stem seals or piston rings can leak oil into the combustion chamber.