Oil dependency and global warming have stimulated R&D activities on the utilization of secondary biofuels. This article investigates the suitability of coconut shell-derived producer gas (a secondary gaseous biofuel) as a substitute for coal gas from an environmental perspective using life cycle assessment (LCA) approach. Thermochemical gasification in an air-fluidized bed with steam injection is the gaseous fuel production process. LCA is carried out with respect to Indian conditions based on primary and modified Ecoinvent 2.0 data using IMPACT 2002+ environmental impact assessment methodology. The study indicates that coconut shell-derived producer gas life cycle is capable of saving 18.3% of emissions causing global warming potential, 64.1% of emissions causing ozone depletion potential, and 71.5% of nonrenewable energy consumption. The analysis of energy and exergy consumptions of the two life cycles reveal that the renewable fraction in the total energy demand is 62.9% for producer gas life cycle, while it is only 2.8% for coal gas life cycle. Allocation of the by-product, coconut palm residues, is the major responsible factor for this reduction in environmental burden. Based on the existing fertilization practice and the utilization of electricity from the Indian electric grid, substantial green house gas (GHG) emission savings cannot be achieved for producer gas life cycle over coal gas life cycle. However, the green electricity-aided catalytic gasification of coconut shell produced by organic farming can result in 43.4% reduction in GHG emissions, meeting European Union renewable energy directive.