In this study a new approach of using life cycle assessment (LCA) in design situations is adopted. The environmental impact of the different sub-processes is simplified and expressed as a cumulative formation rate of environmental impact (expressed as ecopoints or equivalent). The LCA does not change over time but the LCA is dynamic due to its dependence of the chosen design parameters (residence time and temperature). Therefore, it is possible to environmentally optimise different systems such as energy systems. The method is applied to an energy system where a superheated steam dryer is integrated in a local district heat and power plant. Although some primary environmental data are uncertain in the analysis, it is clear that the externally produced electrical energy, due to the exergy losses of the steam used for drying, effects the environmental optimisation of the system. If it is assumed that any additional electricity that may be required in the total energy system is obtained from old Danish coal plants a lower drying temperature is preferred. The capital goods are not important in the environmental study but it is important in the economic study. Many environmental and economical effects are coupled. A dried biofuel will create lower losses during combustion, due to the flue gas, and will therefore make use of less biofuel, less transports, etc. The effects of organic losses of the biofuel are estimated to be of minor importance due to the optimisation of the system if the organic compounds from the exhaust steam are reduced inside the system. If combined economical and environmental optima are demanded it is possible that Pareto curves can support the decision making.