Decrease of fossil fuel consumption in the energy sector is an important step towards more sustainable energy production. On the other hand, domestic and imported biomass or biofuels which are used as energy sources play an important role in many future energy scenarios and national policies. Biofuels have been evaluated as an ecologically benign alternative to fossil fuels. The aim of this paper is the life cycle assessment of the biomass used as energy source. Life Cycle Analysis (LCA) was applied to a pellet factory, which operates in the area of Kozani (Western Macedonia, Greece). A feasibility study was carried out (including the calculation of all the costs, pollutant emissions, solid and liquid waste production, from the birth of the raw material to final consumption of pellets based on the characteristics, dynamics and customer base of the plant pellet production.