Photosynthetic cyanobacteria have attracted interest as production organisms for third‐generation biofuels, where sunlight and CO2 are used by microbes directly to synthesize fuel molecules. A particularly suitable biofuel is n‐butanol, and there have been several laboratory reports of genetically engineered photosynthetic cyanobacteria capable of synthesizing and secreting n‐butanol. This work evaluates the environmental impacts and cumulative energy demand (CED) of cyanobacteria‐produced n‐butanol through a cradle‐to‐grave consequential life cycle assessment (LCA). A hypothetical production plant in northern Sweden (area 1 ha, producing 5–85 m3 n‐butanol per year) was considered, and a range of cultivation formats and cellular productivity scenarios assessed. Depending on the scenario, greenhouse gas emissions (GHGe) ranged from 16.9 to 58.6 gCO2eq/MJBuOH and the CED from 3.8 to 13 MJ/MJBuOH. Only with the assumption of a nearby paper mill to supply waste sources for heat and CO2 was the sustainability requirement of at least 60% GHGe savings compared to fossil fuels reached, though placement in northern Sweden reduced energy needed for reactor cooling. A high CED in all scenarios shows that significant metabolic engineering is necessary, such as a carbon partitioning of >90% to n‐butanol, as well as improved light utilization, to begin to displace fossil fuels or even first‐ and second‐generation bioethanol.