Coal-fired diesel engines utilizing coal-water slurries have been intensively investigated by previous researchers. Specialized coal-water slurries injection equipment was developed to handle the slurries, and hard materials were used to handle the abrasion due to coal ash. Charcoal-based water slurries are shown to result in dramatically reduced engine abrasion problems compared to coal. An economic comparison of charcoal-based water slurries to #2 diesel fuel for fueling diesel engines shows promise for the charcoal-based water sluries diesel fuel. In addition, the potential supply of charcoal is adequate to supply 75% of current diesel fuel consumption.