The current European context, affected by the dramatic conflict between Russia and Ukraine and the related energy and food shortages, is putting a strain on the natural gas availability of the European member states. The latter are forced to new negotiations with other potential energy suppliers, to urgent internal measures to reduce energy demand and, at the same time, to fulfil their commitments to internationally agreed climate targets, where the energy transition is a key strategy. A sustainable energy transition strategy is also essential in circular economy implementation (CE), requiring the replacement of fossil energies with renewable ones. In turn, the energy transition should meet the CE principles to reduce the consumption of natural resources and the contribution to climate change. In this context, this study assesses the environmental impacts of the Italian and EU electricity mixes under different governmental and research scenarios and perspectives, by means of the Life Cycle Assessment approach (Midpoint and Endpoint LCA). Results show that the shift from the BAU electricity mix (year 2021) to the emergency Government plan scenario (2021–2023) replacing 14% of Russian natural gas by means of 42% oil and coal and 58% renewables slightly reduces the contribution to Midpoint LCA impact indicators, including global warming and fossil resource scarcity, while still contributing to particulate matter formation, terrestrial acidification, eco-toxicity and water consumption. The contribution to global warming further decreases in the other modelled scenarios, where natural gas is assumed to decrease from 30% to a high 60% in favour of renewables (Governmental plan 2030 scenario). Other impacts, in particular terrestrial and human toxicity, are instead expected to worsen, calling for much needed improvement of renewable technologies. Further, the Endpoint LCA impact indicators, expressed as DALY (human health damage), lost species potential (biodiversity damage) and increased costs for the extraction of mineral and fossil resources, improve in the Governmental Plan 2030 scenario and other modelled options. LCA shows to be a key method for the energy transition, in order to identify hotspots of modelled electricity scenarios and suggest more environmentally, circular and socially just improvement solutions. The adoption of the concept of CE in energy transition entails the expansion of the boundaries of an LCA to include the end-of-life of renewable technologies (so-called “cradle to cradle” approach) and the assessment of the most successful options to mitigate the environmental and social impacts of energy transition.