Recently, many small and medium size diesel vehicles have been equipped with turbocharger and EGR system to get high performance and reduce $NO_x$ emissions but its application to heavy-duty diesel engine is not common yet. In this work, the simulation model for EURO-3 engine was developed using WAVE and then its performance and emission level were verified by comparing with experimental results. The possibility of current EURO-3 engine equipped with LPL EGR system which would be satisfied the EURO-5 regulation are examined. ESC 13 mode was chosen as the primary engine test mode, and the injection timing and fuel quantity were changed to compensate the lost engine performance caused by EGR. The system developed in this study shows that the current EURO-3 engine could satisfy EURO-5 $NO_x$ regulation by applying LPL EGR.