Climate change is driving global endeavours to achieve carbon neutrality and renewable energy expansion. Sludge, a nutrient-rich waste, holds energy potential yet poses environmental challenges that need proper management. We conducted a comprehensive life cycle assessment to evaluate the energy balance and environmental footprint of the most commonly used sludge management scenarios in BRICS countries, namely Brazil, Russia, India, China, and South Africa. Technologies such as incineration and anaerobic digestion with energy recovery units (i.e., cogeneration unit) maximize energy balance and minimize the environmental footprint, with incineration showing a superior performance. Shifting sludge management scenarios from the worst to the best can boost energy production by 1.4-98.4 times and cut the environmental footprint by 1.5-21.4 times. In 2050, these improvements could lead to a 98-fold boost in energy generation and a 25-fold drop in carbon emissions, according to the Announced Pledges Scenarios. Optimizing parameters such as volatile solids and anaerobic digestion efficiency further boosts energy output and minimizes the environmental footprint. This study offers robust evidence to support sustainable sludge management and thus promote energy recovery and carbon neutrality goals, guide technological transitions, and inform policymaking for sustainable development.