Charcoal production stemming from small-scale Eucalyptus camaldulensis plantations has brought about significant socio-economic benefits and improved livelihoods in Ethiopia. Nevertheless, the current practice involves the use of traditional earth mound kilns, leading to inefficiencies, reduced charcoal income, and environmental pollution. This research aims to assess charcoal conversion efficiency, perform a cost-benefit analysis, and measure gas emissions from improved charcoal-making kilns sourced from Eucalyptus camaldulensis small-scale plantations in comparison to traditional earth mound kilns in northwestern Ethiopia. A one-way analysis of variance (ANOVA) was executed, with a significance level set at 0.05. The study results indicate a significant (P < 0.001) disparity in charcoal conversion efficiency across the various tested kilns, with the ranking as follows: Green mad retort kiln (33.7%) > Casamance kiln (32.09%) > MRV steel kiln (28.25%) > traditional earth mound kilns (23.55%). The improved charcoal-making kilns enhanced wood-to-charcoal conversion efficiency by 20-43% compared to traditional earth mound kilns. In terms of financial viability, Casamance improved kilns generated the highest equivalent annual charcoal income (117,126.9 ETB/year), followed by Green Mad Retort (82,893.8 ETB/year) and MRV steel kilns (58,495.9 ETB/year). As anticipated, traditional earth mound kilns yielded the lowest net present value (47,304.3 ETB/year). Traditional earth mound kilns also exhibited significantly longer carbonization times (P < 0.001), taking 3.6 times longer than the Mark V kiln and 2 times longer than the Casamance kiln. Furthermore, the statistical analysis demonstrated that improved charcoal-making technology reduced carbon dioxide (CO2) emissions by 36.1-50.7%, carbon monoxide (CO) emissions by 39.2-54.3%, and methane (CH4) emissions by 29.6-47%. In conclusion, the use of improved charcoal-making kilns has demonstrated significant enhancements in charcoal conversion efficiency, charcoal income, and environmental sustainability. Given these positive outcomes, we strongly recommend a decisive transition from traditional to cleaner, sustainable, and less emissions-intensive charcoal making kilns.