Carbon-based fuels used in spark-ignition (SI) engines play a significant role in the formation of greenhouse gas emissions, which contribute to global warming and climate change. Replacing these fuels with renewable, sustainable, and clean-burning alternatives can minimize the formation of greenhouse gases (GHG). As a carbon-free fuel, hydrogen is a highly suitable alternative to support zero-carbon goals and is particularly well-suited for SI engines due to its high energy content and high-octane number. In this study, the role of spark plug gap (SPG) and ignition timing (IT) on performance, emissions, energy, exergy, economic, and environmental damage cost is investigated in an SI engine operated with a constant mass flow rate of hydrogen. The spark plug gap is varied as 0.75 mm (SPG1), 1 mm (SPG2), and 1.25 mm (SPG3), while the ignition timing is adjusted to 4, −2, −8, −14, and −20 degrees crank angle (°CA), respectively. The results show that increasing the SPG from 0.75 mm to 1.25 mm leads to an average reduction of 2.3% in brake specific fuel consumption (BSFC) and an average increase of 2.3% in brake power (BP). Additionally, with SPG3, the specific exergy cost of work decreases by approximately 2.5% on average, while the environmental damage cost increases by about 8.7% on average. In summary, increasing the SPG improves engine performance, exergy efficiency, and economic sustainability, but does not appear to be sustainable in terms of environmental impact.