Biodiesel is proven to be an effective replacement for fossil fuels, and ongoing research aims to improve its quality. One method for this improvement is by adding nanoparticles to the biodiesel and various tests are performed to evaluate the efficiency and emission profile of the fuel blends generated. The exergy and energy values of these fuel blends are more important than the tests that are performed to evaluate the performance, emission, and combustion levels. In this study, biodiesel blends are produced using the green alga Chlorella vulgaris. Four different fuel blends are prepared: MB0% (pure diesel 100% + microalgal biodiesel 0%), MB10% (pure diesel 90% + microalgal biodiesel 10%), MB20% (pure diesel 80% + microalgal biodiesel 20%), and MB30% (pure diesel 70% + microalgal biodiesel 30%). A transesterification method is used to convert the Chlorella vulgaris oil into biodiesel and then various biodiesel-diesel blends were prepared. The physical and chemical characteristics of the fuel blends determined. Experimental tests are performed using a single-cylinder diesel engine with varying loads, ranging from 0% to 100% at 25% intervals. The engine rotational speed is maintained at 1500 rpm throughout the tests. Exergy analysis is used to assess the transformation of thermal energy into mechanical energy. The parameters examined are brake power, heat taken by cooling water, and heat taken by exhaust gases. Exhaust gas emissions, such as CO, NOx, HC, and soot, are measured at different loads. The results showed that the presence of oxygen in the biodiesel and the resulting increase in combustion temperature increases the formation of NOx, resulting from the cylinder temperature increase. However, the emissions of carbon monoxide, hydrocarbon, and soot were decreased, except for nitrogen oxides.