Waste disposal is a controversial issue in many European countries: concerns about potential health effects and land value loss as well as the fulfillment of the European Landfill Directive and Waste Framework Directive have significantly changed the way waste should be managed. An appropriate management of municipal solid waste (MSW) may allow a significant enhancement of efficiency in resources use, by recovering both energy and materials from waste, otherwise landfilled, thus replacing fossil fuels and virgin materials with renewable sources. Separation and recovery of the biodegradable fraction of municipal solid waste is encouraged as a mean to produce bioenergy. Therefore, if not source segregated, innovative waste refining technologies may provide potential solutions for separation of organic fraction and improved energy and materials recovery. This paper presents a comprehensive system study of a recently developed technology aimed to improve the MSW management in order to decrease the demand for new landfill space and, at the same time, contribute to the urban energy needs. As part of a wider Life Plus Project entitled MARSS (Material Advanced Recovery'Sustainable Systems), funded by European Community in 2012, the environmental assessment of an innovative and enhanced mechanical and biological treatment (MBT) demo plant installed in Mertesdorf (Germany) was performed by means of the SimaPro 8.0.5 LCA software, utilizing ReCiPe (H) Midpoint method for the impact assessment. The plant under study is designed to concentrate the biodegradable part of MSW in the <40 mm fraction, through a series of refining and recovery steps, to remove contaminants and obtain a suitable biomass fuel with a final marketable quality fulfilling the requirements for biomass power plants to generate urban decentralized production of heat and power (CHP). This study aims at understanding if and to what extent the MBT-MARSS plant is environmentally sound, by investigating environmental costs and benefits of replacing MSW landfilling and waste-to energy disposal by means of boosted separation of biomass for energy generation in CHPs and other recoverable fractions (metals, plastic). Steps and/or components that can be further improved are also assessed. Sensitivity of impacts to assumptions regarding the source of replaced electricity was also tested. Results not only emphasize the novelty of a promising new technology, but also the extent of benefits that can be achieved depending on the actual power generation technique that is replaced by means of the energy recovered in the process. The quantitative evaluation of the MARSS technology shows that appropriate design and management of the MBT plant lead to substantial reduction of environmental impacts as well as material and energy resource savings, thus putting forward a technical solution suitable for those cities/countries where other solutions are still lacking or inappropriate or unfeasible. (C) 2016 Elsevier Ltd. All rights reserved.