Utilizing waste cooking oil biodiesel in compression ignition (CI) engines promotes sustainability by mitigating waste and reducing fossil fuel dependency. This study evaluates the thermodynamic, environmental, and enviroeconomic impacts of pure biodiesel, a fixed 80%–20% (by volume) biodiesel–fusel oil blend, and subsequent blends containing 10%, 15%, and 20% di-n-butyl ether as a cetane improver. Experiments are conducted in a water-cooled, direct-injection CI engine under varying loads (10–50 Nm). The results show that the use of fusel oil raises the specific fuel consumption by an average of 4.3%, whereas this increase decreases to 1.9% with the incorporation of di-n-butyl ether. Compared to biodiesel combustion, the blend containing 20% di-n-butyl ether reduces CO emissions by an average of 25%, while increasing HC, CO2, and NOx emissions by average rates of 15%, 9%, and 19%, respectively. In terms of energy efficiency, the use of di-n-butyl ether reduces the total fuel energy by an average of 1.4% and the lost energy by an average of 2.3%. Furthermore, the fusel oil–biodiesel blend containing di-n-butyl ether reduces exergy destruction by 2.9% and increases the exergy efficiency by an average of 1.2%. Although the exergetic performance of the di-n-butyl ether–blended test fuels shows a slight improvement, the overall environmental impact tends to increase significantly due to the rise in CO2 and NOx emissions. The total environmental impact increases by an average of 18%, while the enviroeconomic impact increases by an average of 12%.