Methanol has been identified as a potential substitute for conventional fuels (diesel, petrol) from scalability, sustainability, and an economic viewpoint. Economically, methanol could be cheaper than conventional fuels based on the price per MJ energy. This study evaluated the possibility of displacing the diesel (90% on an energy basis) by methanol in the locomotive engine using a novel co-axial injection concept while evaluating the different methanol injection timings. Pilot diesel injection (10% on an energy basis) ensured the combustion of injected methanol. A 1-D model of a 16-cylinder locomotive engine was developed for the parametric study to identify a suitable methanol injection strategy corresponding to co-axial injector configuration. Three different parameters were selected to investigate the effect of the new co-axial injection system on the engine performance, combustion, and emissions. These were (i) methanol injection timing, (ii) nozzle design parameters (hole diameters and the number of holes) for methanol injection, and (iii) nozzle design for diesel injection. Three different methanol injection strategies (ITM1, ITM2, ITM3) were evaluated at eight different notches of the locomotive engine for identical diesel injection timings of the validated base model. ITM1 emerged as the best strategy to inject methanol into the engine cylinder because of relatively higher in-cylinder pressure and comparable heat release rate (HRR). The maximum in-cylinder pressure (Pmax), the crank angle at maximum pressure (°CA Pmax), the start of combustion (SoC) duration, combustion duration (CD), and torque were comparable to the baseline diesel-only fuelling. For this strategy, co-axial injector design parameters [diesel's nozzle diameters (HDD) = 0.2 mm, number of nozzles for diesel (NHD) = 4, methanol nozzle diameters (HDM) = 0.35, number of nozzles for methanol (NHM) = 9)] exhibited promising results. Overall, the first injection strategy emerged as the best for direct methanol injection in the locomotive engine at all engine loads. The main finding of this study was that since methanol had a higher latent heat of vaporization, it should not be injected too late after the diesel pilot injection. This means that methanol must be injected in a sufficiently hot environment to easily vaporize it to ensure its participation in combustion without struggling for evaporation due to the colder in-cylinder environment. The methanol showed relatively lower environmental impact in all three strategies by significantly reducing the NOx emissions. NOx control is a major challenge for the surface transport industry. It could be resolved using methanol, which may expedite its use in internal combustion engines (ICEs), cleaning up the combustion engine based transportation. This simulation study demonstrated that petroleum usage and its negative environmental impact could be reduced by using cleaner/greener methanol.