Abstract Biodiesel degradation through autoxidation radical chain reactions adversely affects long-term storage stability, high thermal oxidation stability, and consequently biodiesel consumers’ acceptance. Propyl gallate, the most promising synthetic antioxidant, is widely used to address this challenge. However, the application of this synthetic antioxidant is associated with health concerns such as risk of brain tumors as proposed by the National Toxicology Program (U.S. Department of Health and Human Services). Herein, the application of a naturally-originated alternative to propyl gallate, i.e., pistachio hull extract in canola biodiesel was investigated from technical and environmental viewpoints. According to the results achieved, a concentration of 2500 ppm of the bio-antioxidant and 250 ppm of the synthetic antioxidant was needed to improve the induction period of the investigated biodiesel from 1.53 h to above 3 h as required by ASTM D6751-12 specification for biodiesel oxidation stability. In spite of the fact that the higher concentration of the bio-antioxidant was required, its application would be justified by the probable health hazards of its synthetic counterparts. On the other hand, 23% of the global biodiesel production takes place in top pistachio producing countries where a huge amount of pistachio fresh hulls are generated. Therefore, valorization of this considerable agro-waste stream into a natural antioxidant, i.e., pistachio hull extract, seems to be a promising strategy to enhance the favorable environmental and health aspects of biodiesel. In addition, life cycle assessment revealed that the production and application of the bio-antioxidant were favorable from the climate change and human health perspectives compared with propyl gallate.