This study was carried out to produce low-emitting biomass pellets biofuel from selected forest trees such as (Cedrus deodara and Pinus wallichiana) and agricultural crop residues such as (Zea mays and Triticum aestivum) in Gilgit-Baltistan, Pakistan using indigenously developed technology called pelletizer machine. Characterization, environmental life cycle impact assessment, and cumulative energy demand of biomass pellets biofuel produced from selected agriculture crops and forest tree residues were conducted. The primary data for biomass pellets production was collected by visiting various wood processing factories, sawmills, and agricultural crop fields in the study area. Biomass pellets are a type of biofuel that is often made by compressing sawdust and crushing biomass material into a powdery form. The particles are agglomerated as the raw material is extensively compressed and pelletized. Biomass pellets have lower moisture content, often less than 12%. Physically, the produced pellets were characterized to determine moisture content, pellet dimensions, bulk density, higher heating value, ash content, lower heating value, and element analysis. A functional unit of one kilogram (kg) biomass pellets production was followed in this study.The life cycle impact assessment of one kg biomass pellets biofuel produced from selected agro-forest species revealed environmental impact categories such as acidification (0.006 kg SO2 eq/kg pellets), abiotic depletion (0.018 kg Sb eq/kg pellets), marine aquatic ecotoxicity (417.803 kg 1,4-DB eq/kg pellets), human toxicity (1.107 kg 1,4-DB eq/kg pellets), freshwater aquatic ecotoxicity (0.191 kg 1,4-DB eq/kg pellets), eutrophication (0.001 kg PO4 eq/kg pellets), global warming (0.802 kg CO2 eq/kg pellets), and terrestrial ecotoxicity (0.008 kg 1,4-DB eq/kg pellets). Fossil fuel consumption was the hotspot source to all environmental impacts investigated. To measure the cumulative energy demand of biomass pellets made from different agroforestry species leftovers showed that the maximum cumulative energy was from wheat straw pellets (13.737 MJ), followed by corncob pellets (11.754 MJ), deodar sawdust pellets (10.905 MJ) and blue pine sawdust pellets (10.877 MJ). Among the various production activities, collection and transportation of primary raw material, crushing, screening, adding adhesives, pelletizing, cooling, final screening, and packing have the maximum contribution to the water scarcity index, followed by lubricating oil (0.00147m3). In contrast, the minimum contribution to water footprint was from electricity (0.00008m3) and wheat starch (0.00005m3). The highest contribution to the ecological footprint impact categories such as carbon dioxide, nuclear, and land occupation was lubricating oil and less contribution of wheat starch and electricity for manufacturing one kg pellets biofuel. It is concluded that physico-mechanical and combustion properties of the biomass pellets biofuel developed in the present study were following the Italian recommended standards. Therefore, it is strongly recommended that the Government of Pakistan should introduce the renewable biomass pellets industry in the country to reduce dependency on fossil fuels for cooking and heating purposes.