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Diesel-ethanol dual-fuel combustion has been recognized as an effective alternative to improve efficiency, reduce emissions and substitute part of the fossil fuel. In this regard, the need to improve engine efficiency has continued to drive studies through the understanding of the engine’s thermodynamics. However, the energy analysis based on the first law of thermodynamics does not identify and quantify the system inefficiencies, being insufficient to reveal the best efficiencies of any system. Therefore, the exergy analysis based on the second law of thermodynamics is required to understand and improve the actual efficiencies of the entire system and has higher research significance. Exergy analysis in recent years has been widely used in various thermal systems.