The use of synthetic fuels has shown high potential to achieve sustainable transportation. However, the current synthetic fuel options are either not suitable for the current fleet of vehicles or require new production processes, which has delayed their introduction to the market. A potential solution is the use of Hydroformylated Fischer-Tropsch (HyFiT) fuels. This fuel option combines two established technologies, Fischer-Tropsch synthesis and hydroformylation, to create a mixture of alkanes and alcohols that can serve as fuel. The goal of HyFiT-fuels is to address four main challenges of synthetic fuels: (1) using mature technologies, (2) compatibility with global fuel standards and elastomer materials, (3) reducing combustion-induced emissions, such as nitrogen oxides (NOX) and particulate matter (PM), and (4) supporting the transition to net-zero greenhouse gas emissions. The research conducted shows that HyFiT-fuels can effectively tackle all of these challenges simultaneously, and therefore, offer a promising complement to electrification efforts. The investigations reveal the potential of HyFiT-fuels with 20 and 40 wt% alcohol content (HyFiT-20% & HyFiT-40%) to replace diesel fuel in a light commercial hybrid electric vehicle. The study experimentally examines the fuel’s impact on the emissions of CO2, PM, and NOX, and the theoretical potential for NOX reduction by increasing exhaust gas recirculation (EGR) rates. The results show that HyFiT-fuels used as drop-in fuel without any further adaptations can reduce PM engine-out emissions by 55% (HyFiT-20%) respectively 70% (HyFiT-40%) and CO2 tailpipe emissions by 3–5% compared to diesel fuel.