Energy conservation and efficiency have always been the quest of engineers concerned with internal combustion (IC) engines. A diesel engine generally offers better fuel economy than its counter part petrol engines. It rejects about two-third of heat energy of the fuel to the coolant and one-third to the exhaust, leaving only about one-third as useful power output. Theoretically if the heat rejected could be reduced, then thermal efficiency would improve, at least up to the limits set by the second law of thermodynamics. The main objective of low heat rejection (LHR) engines is to improve the thermal efficiency by reducing the heat lost to the coolant. Diesel engines with their combustion chamber walls insulated by ceramics are referred to as LHR engines. To meet increasing energy requirements, there has been growing interest in alternative fuels like biodiesels derived from vegetable oils to provide a suitable diesel oil substitute for IC engines. Vegetable oils present a very promising alternative to diesel oil since they are renewable and have similar properties. Vegetable oils offer almost the same power output with slightly lower thermal efficiency when used in a diesel engine. In view of this, Honge oil, being non-edible, could be regarded as an alternative fuel for compression ignition (CI) engine applications. The viscosity of Honge oil is reduced by transesterification to obtain Honge oil methyl ester (HOME). In the present work, an attempt has been made to utilize the low volatile Honge oil and HOME in a CI engine to study the performance, combustion, and emission characteristics with a ceramic coating of partially stabilized Zirconium (PSZ) on combustion chamber elements. Initial experiments were conducted on a single cylinder, direct injection, four stroke, water-cooled CI engine without LHR using diesel, Honge oil and HOME to determine optimum injection timings and injection pressures. The optimum values of injection timings were found to be 23° before top dead centre (BTDC) for diesel and 19° BTDC for Honge oil and HOME. Optimum injection pressures were 260 and 205 bar for Honge oil and HOME, respectively. The results obtained showed decrease in brake thermal efficiency and increase in emissions for Honge oil operation compared with conventional diesel engine operation. However, with HOME marginal improvement in brake thermal efficiency and reduction in emissions were observed when compared with Honge oil operation. Further tests were conducted on the CI engine for Honge oil and HOME with ceramic coating on combustion chamber surfaces. The results obtained showed improvement in brake thermal efficiency and reduction in emissions. The effect of injection timings/injection pressures on combustion, rate of heat transfer, cumulative heat transfer, combustion duration and delay period have been considered and analysed for the overall performance of LHR and conventional diesel engines for different fuels tested. However, results obtained with optimum injection timing and injection pressure have only been presented.