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Exhaust emission is one of the kind emission have contribute to the greenhouse effect in the world. Ethanol is one of the best tools to fight air pollution from vehicles. From its biodegradable nature to reductions in greenhouse gas and tailpipe emissions, ethanol provides a tool to address environmental concerns without requiring an entirely new way for goods and people to get from one place to another. Ethanol contains 35% oxygen and with adding oxygen to fuel results in more complete fuel combustion, reducing harmful tailpipe emissions. This paper addresses the possibility study of ethanol percentage to changing of performance and exhaust emissions for Diesel Engine using Virtual Engine Simulation Tool AVL Boost. In this study the blend formulation between Ethanol and Diesel Fuel were E0, E2.5, E5, E7.5 and E 10. The performance of diesel engine simulated in 1,000-1,500 rpm with 0, 10, 20, 30, 40, 50 and 60 Nm engine loads. The direct blending of ethanol and diesel fuel has advantages reducing exhaust emissions CO, Soot and NOx percentages. The engine power break of pure diesel is slightly lower than those of E2.5-E10, especially for speed above than 1400 rpm. The simulation work with the same results compare to the experiments can reduce the cost of research.