In the era of decarbonization driven by environmental concerns and stimulated by legislative measures such as Fit for 55, the industry and transportation sectors are increasingly replacing petroleum-based fuels with those derived from renewable sources. For many years, the share of these fuels in blends used to power compression ignition engines has been growing. The primary advantage of this fuel technology is the reduction of GHG emissions while maintaining comparable engine performance. However, these fuel blends also have drawbacks, including limited ability to form stable mixtures or the requirement for chemical stabilizers. The stability of these mixtures varies depending on the type of alcohol used, which limits the applicability of such fuels. This study focuses on evaluating the impact of eight types of alcohol fuels, including short-chain (methanol, ethanol, propanol) and long-chain alcohols (butanol, pentanol, hexanol, heptanol, and octanol), on the most critical operational parameters of an industrial engine and exhaust emissions. The engines being compared operated at a constant speed and under a constant load, either maximum or close to maximum. The study also evaluated the effect of alcohol content in the mixture on combustion process parameters such as peak cylinder pressure and heat release, which are the basis for parameterizing the engine’s combustion process. Determining ignition delay and combustion duration is fundamental for optimizing the engine’s thermal cycle. As the research results show, both the type of alcohol and its concentration in the mixture influence these parameters. Another parameter important from a usability perspective is engine stability, which was also considered. Engine performance evaluation also includes assessing emissions, particularly the impact of alcohol content on NOx and soot emissions. Based on the analysis, it can be concluded that adding alcohol fuel to diesel in a CI engine increases ignition delay (up to 57%), pmax (by approximately 15–20%), HRRmax (by approximately 80%), and PPRmax (by approximately 70%). Most studies indicate a reduction in combustion duration with increasing alcohol content (by up to 50%). For simple alcohols, an increase in thermal efficiency (by approximately 15%) was observed, whereas for complex alcohols, a decrease (by approximately 10%) was noted. The addition of alcohol to diesel slightly worsens the stability of the CI engine. Most studies pointed to the positive impact of adding alcohol fuel to diesel on NOx emissions from the compression ignition engine, with the most significant reductions reaching approximately 50%. Increasing the alcohol fuel content in the diesel blend significantly reduced soot emissions from the CI engine (by up to approximately 90%).