Aiming towards zero waste management of Paddy straw (PS), the study offers a novel route for production of cellulase-free xylanase, using consortia of Trichoderma spp. under Solid State Fermentation (SSF) of PS valorized using nitrogen rich de-oiled neem cake (NC). Life Cycle Assessment (LCA) for enzyme production, performed using SimaPro software, depicted adverse impacts due to electricity consumption (92.84%) and use of ammonium sulphate salt (6.17%). Nonetheless, employing renewable energy and reducing salt consumption could help minimize these impacts. OHR-LCMS study of the partially purified enzyme revealed the presence of β-xylanase and α-L-Arabinofuranosidase. Enzymatic saccharification of various substrates enhanced the release of reducing sugars (mg/g) from corn cob (137.54 ± 0.96), pine needle (41.43 ± 1), sugarcane bagasse (105.17 ± 0.7), and PS (76.66 ± 1.29), demonstrating its applicability in the biofuel domain. LC-MS, ICMPS, and EDX profiling of the residual spent unravelled the manifestation of bioactives, minerals, and silica, playing an essential role as biopesticide and biofertilizer.