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An energy production system that combines biomass and fuel cells produces much energy with minimal environmental impact. However, the hydrogen sulfide (H2S) contained in gasified biomass degrades fuel cell performance, thus negating the advantages of this combination. In this study, the removal of H2S by adsorption after biomass gasification was investigated. Metal oxides with high adsorption performance are common H2S adsorbents. However, they have a significant environmental impact in terms of metal depletion, which is an environmental impact indicator. Therefore, neutralized sediment materials from mine drainage treatments can be used as H2S adsorbents. A previous study found that the adsorption performance of H2S adsorbents is equivalent to that of metal oxides, especially in the high-temperature zone (300 °C), and the environmental impact is considerably lower than that of metal oxides. However, because the neutralized sediment is a powder (Φ 4.5 μm on average), there is a possibility that the gas will not flow due to the pressure drop when it is used in a large adsorption column. Therefore, in this study, we propose the use of granulated neutralized sediments for practical plant operations. No studies have investigated the adsorption performance of granulated neutralized sediment through experiments or quantitatively investigated the effect of using waste material as a H2S adsorbent to reduce the environmental impact of hydrogen production. Based on these data, the sulfur capture capacity of the granulated neutralized sediment was experimentally investigated. The extent to which the environmental impact of the hydrogen production system could be reduced when granulated neutralized sediment was used as the H2S adsorbent was assessed. Note that the granulated neutralized sediment is formed with about a Φ 0.56–1.25 mm diameter. The granulated neutralized sediment exhibited approximately 76.8% of the adsorption performance of zinc oxide (ZnO) on a conventional adsorbent. In terms of the LCA, the global warming potential (GWP) and the abiotic depletion potential (ADP) were improved by approximately 0.89% (GWP) and 55.3% (ADP) in the entire hydrogen production process. This study demonstrated that the use of waste materials can significantly reduce the environmental impact on the entire system. [ABSTRACT FROM AUTHOR]