Abstract Overuse of petroleum and ongoing carbon-di-oxide (CO2) rise in the air of Brunei Darussalam has been emerged as a major environmental concern in this country. To resolve this issue, a comprehensive life cycle assessment (LCA) of alternative biofuel, bioethanol production from microalgae was demanded for realistic implementation. Therefore, LCA of bioethanol production from microalgae in terms of CO2 emission and energy balance was investigated based on the scenario of industrial-scale in Brunei Darussalam. This study demonstrated that 220 tons microalgae biomass was cultivated on 6 ha offshore lands for commercial bioethanol generation. The annual outcome of this commercial bioethanol plant has revealed net CO2 balance 218.86 ton. From the energy perspective, this study manifested itself as favourable with net energy ratio, 0.45 and net energy balance, −2749.6 GJ y−1. Apart from CO2 balance and energy generation aspect, the project demanded low water and land footprints. For photobioreactor cultivation, water and land footprints were 2 m3 GJ−1 and 2 m2 GJ−1, respectively as well as for open pond approach, they were 87 m3 GJ−1 and 13 m2 GJ−1, respectively. The project also presented microalgae growth supplements (phosphorus and nitrogen) accumulation possibilities from wastewater of manure and industries which is another positive aspect for benign environment. Overall, the commercial plant presented low CO2 emission, low land and water demand for microalgae cultivation, alternative eco-friendly and cheaper nutrients sources, quite high energy generation with main product and by-products. Thus, this study projected positive impact on energy and environmental aspects of microalgae-to-bioethanol conversion.