BackgroundUse of bio-based diesel is increasing in Europe. It is currently produced from oilseed crops, but can also be generated from lignocellulosic biomass such as straw. However, removing straw affects soil organic carbon (SOC), with potential consequences for the climate impact of the biofuel. This study assessed the climate impacts and energy balance of biodiesel production from straw using oleaginous yeast, with subsequent biogas production from the residues, with particular emphasis on SOC changes over time. It also explored the impact of four different scenarios for returning the lignin fraction of the biomass to soil to mitigate SOC changes. Climate impact was assessed using two methods, global warming potential (GWP) and a time-dependent temperature model (∆Ts) that describes changes in mean global surface temperature as a function of time or absolute temperature change potential (AGTP).ResultsStraw-derived biodiesel reduced GWP by 33–80% compared with fossil fuels and primary fossil energy use for biodiesel production was 0.33–0.80 MJprim/MJ, depending on the scenario studied. Simulations using the time-dependent temperature model showed that a scenario where all straw fractions were converted to energy carriers and no lignin was returned to soil resulted in the highest avoided climate impact. The SOC changes due to straw removal had a large impact on the results, both when using GWP and the time-dependent temperature model.ConclusionsIn a climate perspective, it is preferable to combust straw lignin to produce electricity rather than returning it to the soil if the excess electricity replaces natural gas electricity, according to results from both GWP and time-dependent temperature modelling. Using different methods to assess climate impact did not change the ranking between the scenarios, but the time-dependent temperature model provided information about system behaviour over time that can be important for evaluation of biofuel systems, particularly in relation to climate target deadlines.Electronic supplementary materialThe online version of this article (doi:10.1186/s13068-017-0907-9) contains supplementary material, which is available to authorised users.