The use of renewable lightweight materials and the adoption of cleaner production are two effective approaches to reduce resource consumption, which contributes to meeting the industry’s environmental impact targets. In a previous study we found, that a miscanthus fibre reinforced cellulose acetate (CA-Miscanthus, 25 wt.%) can be a bio-based alternative to glass fibre reinforced polypropylene (PP-GF, 20 wt.%), as both materials exhibit similar mechanical properties. However, only limited information on the environmental benefits of using bio-based composites instead of their petroleum-based counterparts are available. In this study, we compare the environmental impact of ready to use compound of both materials in the cradle to gate system boundaries, including fibre cultivation, fractionation and refining, fibre pretreatment, and compounding. The functional unit is chosen based on the equivalent function of both materials. The environmental impact is determined using the Product Environmental Footprint (PEF) methodology. The results reveal that the CA-Mis composite has a higher environmental impact than the PP-GF composite in all categories observed, despite its biomass origin. As the primary reason for the high impact, the acetic anhydride use during CA production is identified. The study indicates that, though the bio-composite CA-Mis has mechanical properties comparable to PP-GF composites, it is not as eco-friendly as we initially assumed it to be.