This study presents a comprehensive environmental assessment of hydrothermal liquefaction (HTL) of seaweed into biofuel. We conducted a well-to-wheel life cycle assessment (LCA) for a 25 metric tons per hour (MT/hr) HTL plant, processing seaweed using a detailed process model that captures operational boundaries. Our analysis considered the Net Energy Ratio (NER) and Tools for the Reduction and Assessment of Chemical and Other Environmental Impacts (TRACI) version 2.1 to provide insights into the environmental benefits and areas for improvement for the HTL process. For this purpose, we analyzed two scenarios: a conventional case, for which biocrude separation was achieved via solvent extraction; and an intensified case which uses membrane technology for biocrude recovery. The intensified case demonstrated significant environmental benefits, reducing acidification potential by 36%, aquatic eutrophication by 54%, and ecotoxicity by 49% compared to the conventional case. It also achieved a 45% reduction in global warming potential (GWP) and a 61% decrease in ozone depletion. In comparison to conventional diesel, biodiesel, and biofuel from HTL of microalgae, the intensified case exhibited lower acidification, eutrophication, and ecotoxicity impacts. The intensified case also showed a 32% reduction in resource consumption and a 60.5% improvement in energy efficiency, with a NER of 0.79, which is significantly lower than the conventional case. Overall, the intensified HTL case presents a viable pathway to sustainable biofuel production, offering reduced environmental impacts compared to conventional HTL cases and other fuel sources. These results suggest that further optimization, particularly in minimizing natural gas consumption and maximizing nutrient recycling, will be essential for biofuel from HTL of seaweed to compete with lower-impact alternatives, in broader applications.