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The use of nanomaterials in biofuel production from lignocellulosic biomass offers a promising approach to simultaneously address environmental sustainability and economic viability. This review provides an overview of the environmental and economic implications of integrating nanotechnology into biofuel production from low-cost lignocellulosic biomass. In this review, we highlight the potential benefits and challenges of nano-based biofuel production. Nanomaterials provide opportunities to improve feedstock pretreatment, enzymatic hydrolysis, fermentation, and catalysis, resulting in enhanced process efficiency, lower energy consumption, and reduced environmental impact. Conducting life cycle assessments is crucial for evaluating the overall environmental footprint of biofuel production. An economic perspective that focuses on the cost implications of utilizing nanomaterials in biofuel production is also discussed. A comprehensive understanding of both environmental and economic dimensions is essential to fully harness the potential of nanomaterials in biofuel production from lignocellulosic biomass and to move towards sustainable future energy., (© 2024. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.)