In the context of climate change, the European Union (EU) has established a roadmap for achieving climate neutrality by 2050 through the European Green Deal. This initiative requires an urgent and major shift towards alternative chemical energy carriers to achieve the sustainability targets. Renewable methanol emerges as a major building block for both transportation and the chemical industry and is anticipated to play a significant role in the future energy transition. However, a common argument against methanol is the carbon contained in its lifecycle. This raises the question: How sustainable is this renewable energy carrier throughout its entire production cycle, when considering upstream processes as well? This paper presents research that examines the sustainability impacts of a decentralized renewable methanol production plant in the 10–20 MW power range, which utilizes sewage sludge as green carbon input. In terms of sustainability, the focus lies on Global Warming Potential and water consumption. For this purpose, a Life-Cycle Sustainability Assessment is performed. This assessment follows the methodology of DIN EN ISO 14040/44 and the EU Product Environmental Footprint procedure. This includes not only the operation phase in the Life-Cycle Inventory, but all aspects from cradle to grave. In contrast to other studies, an integrated approach is used to aggregate the Life-Cycle Inventory data. This approach combines internal and publicly available databases with FEV’s model-based system design including physical-empiric simulations models, transient operation with fluctuating renewable energy and a DoE based techno-economic optimization. To deal with uncertainties, a comprehensive sensitivity analysis is conducted and discussed.