Combustion of coal, a fossil fuel, in power plant, is a major source of carbon dioxide emission, a greenhouse gas that causes global warming. Malaysia is one of the major exporters of palm oil and has 421 palm oil mills operating in 2010. Some of the residues from these mills like palm kernel shell and palm mesocarp fibre were converted into value-added products. An optimum biomass fuel briquette was obtained with palm kernel shell and palm mesocarp fibre as the major ingredients. Co-firing coal with biomass is a possible approach for power plant to curb the excessive emission of carbon dioxide. In this study, bio-briquette having 50 coal and 50 biomass which consisted of the ingredients of optimum biomass fuel briquette were studied in details. Comparison of the fuel properties, combustion characteristics and carbon dioxide emission between the optimum biomass fuel briquette and bio-briquette was made. © (2013) Trans Tech Publications, Switzerland.