The global transition to sustainable energy necessitates innovative strategies to decarbonize diesel engines while maintaining performance and compliance with environmental regulations. This study develops and evaluates an optimized ternary biodiesel-ethanol-diesel blend (B12E3D85) through an integrated framework combining experimental engine testing, response surface methodology, and life cycle assessment (LCA). Algae biodiesel and molasses-derived ethanol were blended with diesel, and a central composite design was employed to model interactions between fuel composition (0–40 % biodiesel, 0–20 % ethanol), engine speed (1000–2800 rpm), and load (20–100 %). Multi-objective optimization using desirability functions identified 12 % biodiesel, 3 % ethanol, 1900 rpm, and 60 % load as optimal parameters, achieving a 72 % reduction in CO, 65 % in HC, and 57 % in smoke opacity compared to diesel, with a moderate NOx penalty (14 % increase). The ternary blend retained 97 % of diesel’s brake power and 92 % of its torque while achieving near-diesel thermal efficiency (37.6 %). Comparative LCA revealed the blend’s intermediate global warming potential (134.25 g CO2 eq/kWh), 13 % lower fossil fuel depletion than diesel, and reduced ecotoxicity relative to pure biodiesel. However, trade-offs in human toxicity and NOx-driven acidification highlight the need for multi-criteria policy frameworks. The B12E3D85 blend emerges as a pragmatic, drop-in fuel compatible with existing engines, aligning with decarbonization mandates like the EU Renewable Energy Directive. This work bridges the gap between performance optimization and systemic environmental analysis, offering a transitional pathway for diesel-dependent sectors.
