Bidirectional charging, such as Vehicle-to-Grid, is increasingly seen as a way to integrate the growing number of battery electric vehicles into the energy system. The electrical storage capacity can be enhanced by using electric vehicles as flexible storage units. However, large-scale applications of Vehicle-to-Grid may require significant expansion of distribution grids. Previous studies lack a comprehensive environmental assessment of related impacts. Contributing to this research gap, this article combines techno-economic grid simulations with scenario-based Life Cycle Assessments. The case study focuses on rural distribution grids in Southern Germany, projecting the repercussions of different charging scenarios by 2040. Besides a Vehicle-to-Grid scenario, a mixed scenario of Vehicle-to-Home, Vehicle-to-Grid, and direct charging is investigated. Results indicate that Vehicle-to-Grid charging increases grid impacts due to higher charging simultaneities and power losses, especially when following spot market prices. Despite these challenges, the secondary use of battery electric vehicles as storage units can offset adverse environmental effects. Bidirectional charging allows for higher use of volatile renewable energies and can accelerate their integration into the power system. When considering these diverse environmental effects, bidirectional charging scenarios show overall lower impacts on climate change per battery electric vehicle compared to direct charging. The insights provided are valuable for researchers, industry, utilities, and policymakers to understand the potential positive and negative impacts of large-scale battery electric vehicle integration. The article highlights the most influential parameters that should be considered before large-scale penetration.