In the study, the effect of dual-fuel technology (i.e., diesel-pilot fuel and hydrogen gas-secondary fuel) on the performance of common rail direct injection diesel engine is studied using an exergy analysis approach. Under exergy analysis, based on the laws of thermodynamics energy and mass conservation is applied for the quantification of irreversibilities and inefficiencies existing in the system and environment. The study is conducted under three different loads (15, 25, and 35 Nm) keeping a constant speed of 2300 RPM. The fuel blends utilized in the study were neat diesel, diesel with 15% H2 and diesel with 25% H2, respectively. Exergy analysis computes the distribution of total fuel exergy in terms of work exergy, engine coolant exergy, exhaust gases exergy, and destruction exergy. Under lower load and lesser hydrogen blending to diesel fuel, considerably lower work exergy and higher destruction exergy is observed in contrast to higher work exergy and lower destruction exergy. With 25% H2 substitution to baseline diesel fuel under 15 Nm load, an improvement of 28.79% in work exergy is observed while destruction exergy showed a decline of 19.97%. The synergistic effect of higher engine load (25 and 35 Nm) along with hydrogen enrichment to baseline diesel showed an improvement in work exergy and a significant reduction in destruction exergy. Exhaust emissions such as smoke opacity (%) declined with hydrogen supplementation while NOx emissions escalated with hydrogen addition to baseline diesel fuel. The results indicate that hydrogen has the potential to serve as an optimized secondary fuel for compression ignition engines, striking a balance between enhancing performance and reducing environmental impact.