Hydrogen co-firing provides a near-term opportunity to reduce emissions from industrial steam boilers, particularly in Thailand where B7 diesel containing 7% palm-oil fatty acid methyl ester (FAME) is the required diesel fuel. However, clear evidence of this system for this type of boiler is still insufficient. In this study, a systematic investigation was performed on a 1,000 kg/h water-tube boiler (Kawasaki 15750) at hydrogen/diesel energy proportions varying from 0 to 30% under a constant low-fire condition. Supplemental oxygen was precisely controlled to maintain an almost constant stoichiometric concentration. The results were further analyzed with a semi-empirical combustion model using extended Zeldovich NOx kinetics. At an H2/diesel energy ratio of 30%, steam production increased by 24.3%, from 323.8 to 402.4 kg/hr. Although diesel consumption rate is almost constant, the addition of hydrogen increased overall fuel consumption energy input by 29 %. The concentration of CO decreased by 73.4%, from 107.0 to 28.5 ppm, and CO₂ emission per unit of steam decreased by 20.1%, from 196.9 to 157.3 g/kg. Measured NO₂ increased by 70.8%, consistent with predicted NOₓ ranges of 36–150 ppm at baseline and 62–256 ppm at 30% H₂, depending on the assumed NO₂/NOₓ fraction. Multivariable analysis indicated that hydrogen addition had a greater impact on the emission response than oxygen enrichment. System efficiency, computed using an input-output method based on ASME PTC 4.1, decreased by 3.60 percentage points. Because the drum water inventory was not recorded at the beginning and end of each test, this decrease reflected a maximum limit on the efficiency loss. Presently, the price of hydrogen costs 753 THB/kg (23 USD/kg). So, hydrogen co-firing was still more expensive than diesel-only operation at all tested ratios. As the price of hydrogen decreases to approximately 120–230 THB/kg (3.7–7.0 USD/kg), which is within the range projected by IRENA for green hydrogen before 2030, hydrogen co-firing could become economically competitive. Therefore, under current hydrogen price, the hydrogen co-firing mainly contributes to increased steam production and lower CO and CO₂ emissions, but it does not provide fuel-cost savings and results in higher NOₓ emissions.