Abstract This study investigates the influence of fuel variation on the operational, environmental, and economic performance of a marine diesel engine. A modified MATLAB-based mathematical model was developed to simulate the engine’s behavior using five different fuels: marine diesel, road diesel, flot fuel, biodiesel, and a diesel–biodiesel blend. The model’s adequacy was verified by comparing its results with the passport data of the Wärtsilä 6L20 engine. Simulation results demonstrated that road diesel provides the highest effective power and lowest specific fuel consumption, while biodiesel ensures higher combustion efficiency but lower energy density. An additional analysis of CO₂ emissions and fuel costs was performed for each fuel type based on real market data for the Caspian Sea region. The findings show that although biodiesel is the most environmentally friendly option, flot fuel remains the most economically viable, while the diesel–biodiesel blend provides a balanced compromise between performance, emissions, and cost. The developed model enables cost-effective and time-saving laboratory simulations of marine diesel engine performance under varying fuel compositions.