The global maritime industry is undergoing rapid transformation driven by the dual demands of greenhouse gas reduction and digitalization. This study developed a Digital Twin (DT) model of a 9.77-ton small fishing vessel and conducted simulations under realistic operating conditions to analyze its propulsion performance and fuel efficiency. The vessel’s main components—governor, engine, reduction gear, propeller, and marine environment—were mathematically modeled and integrated using MATLAB Simulink. To achieve higher fidelity in representing energy consumption, a fuel consumption model reflecting specific engine characteristics was incorporated. Simulation results confirmed that propeller thrust and marine environmental loads increased proportionally with engine speed, while the application of the proposed fuel consumption model led to reduced fuel injection rates near the engine’s optimal efficiency range. The proposed DT model serves as a robust simulation platform for the pre-verification of eco-friendly equipment, alternative fuel adoption, and operational efficiency improvements. It is expected to provide a valuable foundation for future demonstration studies of green technologies in small- and medium-sized fishing vessels.