[UFO]

The biggest challenge is measuring fuel flow. With a diesel you cannot infer fuel flow by measuring air flow, at least not accurately, because fuel mixture is varied unlike a gasser which needs closely held mixtures to prevent knocking and overfueling. That is why method one will give unreliable results, as it simply does what my Scangauge on my OBDII diesel does, infers fuel consumption based on airflow.

Method 2 may be your better option, but that will be vehicle specific based on turbo, injection method and injection pump type.

Honestly, I think the most direct solution may be a pair of high resolution flow meters, one on the supply, one on the return, and fuel consumption is the calculated difference.