This research aims to utilize the energy available from fish canning waste (FCW) as a partial alternative. The fuel is chemically modified to fish canning waste methyl ester (FCWME) by acid‐catalytic transesterification process and blended with diesel at 10%, 20% and 30% volume. The engine utilized in this study is slightly modified by engaging exhaust gas recirculation (EGR) to lower the nitrous oxide (NO) emission of oxygen‐rich fuel blends. Performance tests demonstrated that the FCW/diesel blends show similar patterns to diesel. Higher fuel consumption of 0.01, 0.03 and 0.04 kg/kWh was noted by including FCWME by 10%, 20% and 30% by volume. Power losses of about 1.4%, 1.9% and 2.1% were experienced by blending 10%, 20% and 30% volumes of FCWME with diesel. Conversely, the tailpipe emissions, namely smoke, CO and HC emissions, lowered by 3.7%, 0.017% and 21 ppm, with 117 ppm elevated NO emissions for the FCWME/diesel blends than diesel. The test results revealed that the NO emissions from all test fuels lowered drastically during 10%–30% EGR; 91 ppm reduction in NO emissions was observed at a 30% EGR rate, with a slight increase in other regulated emissions. Considering the encouraging impacts on the environment and improved fuel combustion pattern, FCW biofuel shall be employed as a likely and fractional alternative to diesel fuel.