The oxygenated hydro diesel (OHD) is prepared from hydrogen peroxide (H2O2), acetone, and seaweed polysaccharide. A long-term study was carried out on the OHD fuel blend stability for about a year at various temperatures. The long-term stability shows very stable properties, no easy emulsion breaking, and a long storage period. The neat diesel and blend fuel performance test was conducted at various engine speeds, 1700�3100 RPM the diesel blend with 5 wt. and 10 wt. of H2O2 revealed the best fraction for reducing smoke and emissions. The blend contains 15 wt. H2O2, revealing a significant reduction in exhaust temperature without considering the engine's performance. Moreover, the performance of the OHD also revealed an economizing rate, decreasing environmental pollution and prolonging the engine�s service life. The diesel engine performance and environmental evaluation leading to exhaust emissions characterization (CO X, SO X, NO X, and others). Based on the results, the various concentrations of H2O2 are an effective method for reducing the emission of diesel engines. Decreased CO, SO2, unburned hydrocarbons, and NO2 were also observed as percentages of H2O2. Due to increased oxygen content, water content and cetane number, the number of unburned hydrocarbons from diesel fuel decreased with the addition of H2O2. Therefore, the OHD blend can significantly curtail the exhaust emission of conventional diesel fuel, which will help reduce the harmful greenhouse gas emissions from diesel fuel sources. © 2023, The Author(s).