Improved highly stable formulation for aqueous fuel emulsion compositions with a water continuous phase, having reduced NOx emissions. The fuel emulsion formulation includes diesel fuel, purified water, and an additive package that includes one or more surfactants, lubricity additive, cetane improver, anti-corrosion additive, and an alcohol or other suitable antifreeze, the emulsion having an average droplet size of less than 10 microns.