Abstract The study aims to demonstrate the overall environmental sustainability of biomethane production by anaerobic digestion of the separately collected organic fraction of municipal solid waste. There is a great interest in the utilisation of biofuels produced from biowaste in the transport sector, due to the benefits of reduced pollutant emissions and diversified transport fuel supplies. An attributional, process-based life cycle assessment study quantifies and compares the potential environmental impacts of an anaerobic digestion plant, where the produced biogas is upgraded to biomethane for the transport sector instead that directly burned in a combined heat and power unit. The avoided impacts related to the utilisation of biomethane instead of diesel, petrol or natural gas have been evaluated with reference to a vehicle fleet made of passenger cars and small rigid trucks. They appear large enough to make the biomethane production the cleanest option for the management of biowaste. The global warming and non-renewable energy potentials of the Biowaste-to-Biomethane scenario improve of 79% and 36%, respectively, with reference to the Biowaste-to-Energy scenario. A sensitivity analysis evaluates the effect of several key parameters. Some of them are peculiar for the analysed application, such as the composition of the vehicle fleet, specific biomethane consumptions of these vehicles, and methane slip in the biogas upgrading unit. Some other parameters are more general, such as the final destination of solid digestate, gas engine efficiency, national electric energy mix. The results of the analysis provide data and information to policy-makers, planners and operators that would like or have to approach the management of the separately collected organic fraction of municipal solid waste. They also inform on the environmental advantages connected with the utilisation for road transportation of biomethane produced from this waste fraction.