European countries have recently been required to conform with the European legislation relating to the introduction of biofuels at local and national levels. In order to permit wider implementation of biofuels, the present study explored the use of life cycle analysis (LCA) as a potential tool for analyzing the use of biomass resources for domestic fuel. The LCA performed in this study used the RETScreen International software developed by Natural Resources Canada. This tool embodies a simplified form of the LCA methodology for simulating space heating of houses and domestic water heating. The financial feasibility and environmental sustainability of each proposed project was investigated.