Four rumen-cannulated cows (Bos taurus × Bos indicus, 657 ± 92 kg body weight, BW) in a rotational grazing (Urochloa sp.) system were assigned to different canola oil (CO) inclusion levels, 0.0, 0.40, 0.80, and 1.2 g/kg according to shrunk body weight (SBW, BW adjusted for gastrointestinal filling) in a 4 × 4 Latin Square design to evaluate CO on the CH4 emissions and dietary energy intake. CH4 emissions were estimated using an infrared analyzer methodology (Sniffer method). Grass intake and fecal production were estimated using Cr2O3 as an external marker. CO supplementation increased (linear effect, P ≤ 0.05) total dry matter and gross energy intake with a linear increase (P = 0.09) in neutral detergent fiber (NDF) intake. While digestible energy (Mcal/kg) linearly increased with increasing CO supplementation level (linear effect, P < 0.05), total tract digestion of organic matter, NDF, and CP was comparable (P > 0.05) between levels. Maximal CO supplementation (1.2 g/kg SBW) significantly decreased total ruminal protozoa population, acetate:propionate ratio, and enteric methane production (g/kg DMI) by 9, 5.3, and 17.5%, respectively. This study showed that, for cows grazing tropical forages, CO can be supplemented up to 1.2 g/kg SBW (5.8% of the total diet) without negatively affecting intake and nutrient digestion while reducing ruminal fermentation efficiency and enteric methane emission (≤ 17.5%).