The primary aim of this study is to alternate between conventional fossil fuels and reduce the emissions of greenhouse gases and smoke from diesel engines. The current study aimed to improve the performance and emission characteristics of a variable compression ratio (VCR) diesel engine operated with hybrid biodiesel. Experiments were done with the best hybrid biodiesel, which was made by mixing 20% rubber seed oil (RSO) with 80% waste plastic oil (WPO). The tests were done at four compression ratios (CRs): 16:1, 17:1, 18:1, and 20:1. Under a CR of 20:1 and at full load, the engine?s brake thermal efficiency went up by 30.5%, its brake-specific fuel consumption went down by 0.347 kg/kWh, and notably diminished emissions of carbon monoxide (0.43% volume), hydrocarbons (79 ppm), and smoke (22%). However, with increasing CRs, NOx emissions rose unfavourably (1092 ppm) compared to diesel (820 ppm). Also, diesel and clean (WPO) were compared to see how the CR values affected combustion, performance, and emissions. Compared to diesel, under maximum load and the CR of 20:1, hybrid biodiesel demonstrated approximately 3.7% higher brake thermal efficiency. The findings suggest potential applications for this hybrid biodiesel in the automobile sector, the power generation industry, and marine applications.