Fossil fuels produce greenhouse and harmful gases that have negative impacts on human health and the environment. This study was devoted to producing biochar through microwave pyrolysis at 700 W for 10–30 min and examining the use of biochar as a fuel additive to mitigate harmful gas emissions and improve the overall combustion efficiency. The biochar obtained showed high fixed carbon content (85.7 wt%), low volatile matter (8.4 wt%), and low ash content (2 wt%) and was subsequently used as a fuel additive in biodiesel combustion. The addition of biochar to biodiesel increased the overall combustion efficiency, owing to the oxygenated compounds present in biochar. The post-combustion emissions of the blended fuel showed a lower emission of carbon monoxide and nitrogen oxide, by up to 20 and 3 folds, respectively, compared to that of baseline fuel. This study showed that oxygenated biochar could be used as an additive to increase the combustion efficiency of biodiesel. The platform developed herein could serve multiple objectives of valorizing biomass into a value-added product and mitigating the harmful emissions associated with biodiesel combustion. The latter could enhance the environmental sustainability of this biofuel.