In this study, a life cycle assessment was conducted using the ReCiPe method to estimate the environmental impact of lignite pyrolysis, which is one of the most commonly used technologies for lignite upgrading. Technological advancements significantly affect climate change, human health, and fossil depletion. The influence of lignite pyrolysis on the effect of other categories on the environment was small. Improved efficiency in electricity consumption and energy (i.e., steam and electricity) recovery from oven gas, optimized transportation (i.e., type and distance), and lignite drying technologies, as well as decreased levels of mined lignite and direct air emissions (e.g., heavy metals, benzene, and carbon dioxide) from the lignite pyrolysis stage, are the key factors in reducing the overall environmental impact of lignite pyrolysis.