In Latvia, rapeseed methyl ester (RME) is generally considered to have a significant economic potential in the field of biofuels. As investments grow, it is important to evaluate the environmental impacts of this production and to highlight the main sources of these impacts. Nowadays, the share of biofuels in the transport sector in Latvia is attested to have a value of 0.3% (around 75% biodiesel and 25% bioethanol). Biofuel production in Latvia doubled in the last two years: the current total biodiesel production is approximately 64 ktonne/year (year 2009). The aim of this paper is to understand and model the environmental performance of the biodiesel produced from rapeseeds under the local Latvian conditions. Firstly, energy crops were evaluated by assessing their levels of biodiesel productivity. Secondly, the current Latvian climatic conditions and cultivation parameters were taken into account. To conclude, a comparison with the impacts of fossil based diesel was conducted.