Dual fuel engine operating strategy for optimized hydrogen and hydrocarbon fueling

Operating an engine system includes combusting a gaseous hydrogen fuel (H2) and a gaseous hydrocarbon fuel (HC) at a first substitution ratio in a cylinder in an engine, determining at least one of an H2 fueling command or an HC fueling command based on an H2 availability input and an H2 cost, and outputting the H2 fueling command and the HC fueling command to an H2 injector and an HC admission valve, respectively. Operating the engine system further includes combusting H2 and HC at a varied substitution ratio based on the H2 fueling command and the HC fueling command. At least one of the H2 fueling command or the HC fueling command may be based on a monitored CO2 exhaust level which may be used to populate a stored history of CO2 output.