Biofuel as a sustainable source of energy was investigated in several earlier studies to look for environmentally friendly alternatives to fossil-based fuels. This study aims to investigate a new type of low-cost biofuel based on the palm oil extracted from the palms. The experimental investigation was carried out on an agricultural tractor powered by a four-cylinder, direct-injection diesel engine. Biofuel is produced using a chemical transesterification reaction of the palm oil, in its pure form free of any blend. A 1-D gas dynamics engine model was built to numerically investigate the engine performance and emissions as it is fed with such biofuel. The 1-D engine model was validated against test data for both PAME biofuel and traditional diesel. Based on the findings, the emissions in terms of CO, and CO2 were figured out under six different engine speeds ranging from 800 to 2800 rpm. Also, torque and power as well as the brake-specific fuel consumption (BSFC) were predicted and compared to test data. The use of PAME biodiesel led to up to a 50% reduction in CO emissions, especially at low engine speeds, and up to 20% decrease in CO2 emissions. The findings suggest that the produced PAME biodiesel can be an efficient and cost-effective alternative to traditional diesel.