The environmental performance of production and distribution of densified form of lignocellulosic biomass (i.e., agri-residue based pellets) in Western Canada in terms of energy and greenhouse gas (GHG) emission was assessed. The results show that energy usage and resulted emissions are highest in field activities especially if emission and energy are attributed to straw in farming stage where nitrogen fertilizer is the highest contributor. Significant reduction of energy use (64%) and emission (65%) are possible if the organic fertilizer is used in farming. Adopting the zero tillage option instead of conventional practice results in energy saving (10%) and emission reduction (8%). From the scenario analyses it is also evident that using biomass as an energy source during drying or no drying in pellet production stage or using alternate mode (i.e., truck and train) of transport for pellet delivery result in less than 5% reduction of the energy use and emissions compared to the base case. Agri-pellet has the potential to offset substantial amount of GHG emission compared to other fuel sources including wood pellets. The energy and emission of production chain of agri-pellets may vary between countries but overall trend compared to other fuel sources would be similar. (C) 2011 Elsevier Ltd. All rights reserved.