Graphene is an exciting novel material that possesses incredible characteristics, including high electrical and thermal conductivity, lightweight, flexibility and exceptional strength. It would be useful in many diverse applications but the high cost of producing graphene is an obstacle to large-scale production. A novel method to produce wood-derived graphene through Laser-Induced Graphitization (LIG) has been developed as a sustainable alternative to its fossil precursor. This study aims at addressing this method´s environmental sustainability by comparing it to the fossil-derived precursors. Therefore, an explorative Life Cycle Assessment (LCA) approach is adopted to compare the environmental impact of the new production method to multiple types of fossil-derived graphene production. The study is a Cradle-to-Gate LCA with a declared unit of 1 kg produced graphene in liquid suspension which assesses 18 midpoint impact categories. Key findings indicate that while wood-derived LIG graphene shows potential for reduced environmental impacts, key challenges remain in optimizing energy efficiency and material inputs. The novel method´s hotspot is highlighted as the large use of electricity especially during laser graphitization followed by material inputs such as polyethylene terephthalate (PET). Sensitivity and scenario analyses highlight the importance of parameter optimization in the production process to minimize environmental burdens. This research contributes to the sustainable materials field by identifying critical areas for improvement in the LIG process and providing a foundation for future studies aimed at enhancing the environmental performance of wood-derived LIG graphene production.