Abstract The environmental sustainability of the microalgae Nannochloropsis oceanica cultivation for total fatty acid (TFA) production was analyzed using life cycle assessment (LCA). Pilot data provided by the plant operator from cultivation in Italy using Green Wall Panel (GWP®) photobioreactors were upscaled to a 20-ha production process, and an LCA was conducted and assessed for the Italian regions of Tuscany and Sicily. Two additional scenarios were modelled to analyze the influence of more sustainable framework conditions, respectively nutrient recycling and renewable energy supply. The results show that environmental impacts per functional unit are around 15% less at the site with optimal growth conditions. Between 60 and 80% of the impacts are due to the energy demand during plant operation, infrastructure, and nutrient demand. Nutrient recycling and the gain of an energy credit from the separated biocrude with the hydrothermal liquefaction (HTL) process reduce the environmental impacts in all six International Reference Life Cycle Data System (ILCD) impact categories by an average of 11% compared to a scenario without nutrient recycling. The additional consideration of a renewable energy supply allows for an average reduction of 36% and together with the nutrient recycling of an average of 45% for the global warming potential (GWP) and most of the other impact categories.