Abstract This paper aims to address the question, “What is the environmental performance of crop residues as an alternative energy source to fossil fuels, and whether and how can it be improved?”. In order to address the issue, we compare electricity production from wheat straw to that from coal and natural gas. The results on the environmental performance of straw for energy utilization and the two fossil fuel references are displayed first for different midpoint categories and then aggregated into a single score. The midpoint impact assessment shows that substitution of straw either for coal or for natural gas reduces global warming, non-renewable energy use, human toxicity and ecotoxicity, but increases eutrophication, respiratory inorganics, acidification and photochemical ozone. The results at the aggregate level show that the use of straw biomass for conversion to energy scores better than that of coal but worse than natural gas. In order to investigate the question of whether and how a reduction in the single score per kW h of electricity produced from straw is feasible, we perform a scenario analysis where we consider two approaches. The first one is a potential significant reduction in emissions of nitrogen oxides (NOx) by implementing selective catalytic reduction technology and the second is a potential increase in power generation efficiency. The results of the scenario analysis show that both approaches are effective in enhancing the competitiveness of straw as an alternative energy source, though the second approach “increasing efficiency” is somewhat less attractive than the first “reducing NOx emissions”.