Hydrogen co-firing is a near-term decarbonization option for industrial steam boilers in Southeast Asia, where B7 diesel (a 7% palm-oil FAME blend) is the mandated fuel, yet experimental evidence in this class of equipment remains limited. We report a controlled experimental campaign on a 1,000 kg/hr water-tube boiler (Kawasaki 15750) at H₂/diesel energy ratios from 0 to 30%, with four steady-state replicates per condition. We interpret these measurements with a calibrated PSR/PFR combustion model with extended Zeldovich NOₓ kinetics and a 2D axisymmetric CFD simulation. At 30% H₂, steam output rose 24.3% (323.8 → 402.4 kg/hr) with diesel feed held constant; combustion air was trimmed by supplemental O₂ to hold stoichiometry roughly constant as the H₂ ratio climbed (contributing ~10–15% of the NOₓ rise). CO₂ intensity per kg steam fell 20.1% (202.5 → 161.9 g/kg), CO dropped 73.2% (106.5 → 28.5 ppmv), and estimated NOₓ rose ~64% (NO₂-derived; see §2.3), consistent with thermal-NOₓ amplification. System efficiency (ASME PTC 4.1 Direct Method) peaked at 93.42% near 5% H₂ and declined to 87.45% at 30% H₂. Second-order polynomial correlations (Eqs. 6–9, R² ≈ 0.96–0.99) give compact screening rules, and the CFD model reproduced the measured trends. A fuel-cost-only sensitivity at 2026 Thai market prices (excluding capital, storage, and safety costs) puts the fuel-cost-favourable window at about 12% H₂; under the IRENA Green Hydrogen trajectory, this window expands to the full 0–30% range by 2030. At low-fire operation, H₂ co-firing is a practical retrofit option for B7 diesel water-tube boilers, with NOₓ as the principal trade-off.
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