A combination of thermoplastics and natural fiber reinforcements is considered an ideal choice to mitigate environmental impacts and enhance recyclability or reusability. Chemical treatments are often employed to enhance the thermomechanical properties of natural fiber-reinforced plastics. Nevertheless, it is of paramount importance to assess the techno-economic impact of such chemical treatments and environmentally friendly materials for their implementation in mass productions on an industrial scale. In this work, high-density polyethylene is reinforced with sodium hydroxide (NaOH)-treated and untreated flax fibers to study its impact on mechanical and environmental properties. The composites treated with NaOH exhibited a 37% increase in tensile strength. However, life cycle assessment performed on the NaOH-treated samples showed that they had a global warming potential of 5.8 kg of CO2, a terrestrial acidification potential of 0.0269 kg of SO2, and a human carcinogenic toxicity of 0.031 kg of 1,4-DCB compared to the untreated samples. In summary, the techno-environmental analysis reveals a novel approach to identifying chemical treatments based on their technical and environmental effects.