The diminution of petroleum fuel along with its serious side effect on the environment accelerated an effort to find an option for petroleum. Biodiesel with different blend combinations and emulsified biodiesel have a promising option as an alternative fuel. Work of this manuscript has two phases. Phase one deals with cotton seed biodiesel with different blend combinations such as 10, 20 and 30% by volume as operating fuel. Phase two deals with emulsified cotton seed biodiesel with 5, 10 and 15% of water by volume. To investigate these two phases, fuel, coated/semi adiabatic and uncoated engine operating conditions used. Single-cylinder diesel engine is considered for a coating process. To satisfy the coated engine operating condition fly ash powder is used as a thermal barrier coating (TBC) material with 200 µm thickness. Brake thermal efficiency increment was observed in coated engine for biodiesel fuel and biodiesel with 10% water case. Reduction in emission was observed in the coated engine except NOx emission for both biodiesel and emulsified biodiesel. It is noticed that from phase one cotton seed biodiesel blend (B20) and phase two B20 with 10% water emulsified fuel has a suitable option for diesel fuel on major aspects. © 2020 Informa UK Limited, trading as Taylor & Francis Group.