The global population growth and awareness about the important role of vitamins in human health drive demand for fresh fruits and vegetables. In line with this need, greenhouse cultivation addresses year-round availability, but chemicals pose challenges. Hydroponic systems control pests, boost yields, and decrease chemicals while faced with significant waste generation. Waste generated by hydroponic systems holds potential for repurposing into value-added products, which aligns with the principles of the circular bioeconomy. However, before embracing widespread adoption, it is crucial to assess its environmental compatibility. This study employs a life cycle assessment approach to compare hydroponic tomato production in greenhouses under conventional and circular bioeconomy systems. The first scenario (Sc-1) encompasses hydroponic tomato production in a greenhouse system under a conventional system. The second scenario (Sc-2) involves the production of tomatoes, along with the conversion of residue of tomato production into compost. The third scenario (Sc-3) closely resembled Sc-2, while valorizing residue of tomato production into biochar. The outcomes indicate that per kg of tomato production under Sc-1 leads to a damage of 4.32 × 10−6 DALY to human health, 4.33E−06 species.yr to ecosystems, and 1.82 × 10−1 USD2013 to resources. The results of weighting of environmental damages also shows a total environmental damage of 75.36 mPt per kg of tomato production under Sc-1 which is mainly based on the production and consumption of natural gas. The findings demonstrate that Sc-2 and Sc-3 exhibit a diminished potential on damage to human health, ecosystems, and resource compared to Sc-1, respectively. Accordingly, in comparison to Sc-1, Sc-2 leads to an approximately 11% reduction in total weighted environmental impacts, while Sc-3 results in an approximately 4% reduction in total weighted environmental impacts. Based on these outcomes, integrating compost and biochar production into hydroponic tomato systems holds significant potential for environmental benefits. Accordingly, further research and development efforts should focus on optimizing the efficiency and scalability of composting and biochar production technologies to maximize their impact on sustainability in hydroponic tomato production.