Purpose: This study aims to evaluate the performance of a hybrid biofuel composed of sewage sludge (SS) and spent coffee grounds (SCG), focusing on energy efficiency, drying kinetics, fuel quality, and odor reduction. Research Design & Data: A pilot-scale, low-temperature heat pump drying system equipped with a variable-speed compressor was used to process a 90:10 SS–SCG mixture. Key metrics assessed included final moisture content, specific energy consumption (SEC), lower heating value (LHV), volatile solids content, and odor dilution-to-threshold ratio. Results: The optimal performance was achieved at 160 Hz compressor frequency, resulting in a final moisture content of 5.1% and the lowest SEC (0.582 kWh/kg-H₂O). The hybrid fuel exhibited an LHV of 3,394 kcal/kg and volatile solids content of 66.8%, surpassing standard thresholds for solid recovered fuels. Odor emissions were significantly reduced by 98.8%, from 24,548 to 300 D/T units, due to SCG’s adsorptive properties. Conclusion: The integration of SCG into SS improves drying performance, enhances fuel quality, and drastically reduces odor, offering a promising pathway for renewable energy production and sustainable waste management. These findings contribute to the circular economy by valorizing underutilized organic residues into high-performance biofuels.