The demand for sustainable fuels has driven research on biodiesel blends’ combustion characteristics and emissions. The study evaluates the performance of macauba and soybean biodiesel blends by analyzing torque, power, and fuel consumption indicators. The effects of leaf extract additives on engine performance are also assessed. Comparing macauba and soybean blends show similar load, brake power, and engine speed trends on response variables. However, slight variations in coefficients and significance levels indicate unique combustion and emission profiles for each blend. Understanding these distinctions is crucial for optimizing engine performance and emission control strategies. Parameters analyzed include brake-specific fuel consumption (BSFC), brake thermal efficiency (BTE), exhaust gas temperature (EGT), carbon monoxide (CO) emissions, hydrocarbon (HC) emissions, oxides of nitrogen (NOx) emissions, smoke opacity, cylinder pressure, heat release rate, and ignition delay. Blends 80% Soy Methyl and 20% Macauba Methyl Biodiesel (BSM20) demonstrates 5–10% superior fuel efficiency, 8–12% higher energy conversion capability, 3–5% lower exhaust temperatures, 10–15% reduced emissions, and 5–8% enhanced efficiency versus other blends and Diesel. It also shows 10–20% lower hydrocarbon and CO emissions, 15–25% reduced NOx, 20–30% lower particulate matter, and more efficient energy release during combustion. Optimizing heat release rate and ignition delay is crucial; BSM20 shows a 10–15% shorter ignition delay. Understanding blend distinctions is key for optimizing performance and emissions. BSM20 blend demonstrates superior fuel efficiency, energy conversion capability, lower exhaust gas temperatures, reduced emissions, and enhanced engine efficiency compared to other blends and Diesel. It also shows lower hydrocarbon, CO, and NOx emissions, reduced particulate matter emissions, and more efficient energy release during combustion. Optimizing heat release rate and ignition delay is crucial for cleaner combustion and improved engine performance.