Low iLUC risk feedstocks, such as lignocellulosic no-food crops, have been indicated as sustainable crops for the transition to a bio-based economy. Given the high output to input ratio and the environmental benefits that can be obtained from renewable heat production replacing fossil fuels, the present study addressed the biomass yield, CO2-sequestration, and life cycle assessment of giant reed (Arundo donax L.) and miscanthus (Miscanthus × giganteus Greef et Deuter) growing under different soil water availability and nitrogen fertilization for three consecutive growing seasons in a semiarid Mediterranean environment. Giant reed outperformed miscanthus, showed a higher CO2-sequestration and a lower overall environmental impact. In case of both crops, the irrigation effect was significant, while the one of nitrogen fertilization was not apparent. While giant reed responded positively to reduced irrigation, compared to its highest level, as the plantation became older, miscanthus needed high water volume to get most out its potential yield. Nonetheless, the growing season had also a significant effect on both crops, mainly when low yields were achieved following the establishment year. Unlike the environmental benefits in the impact categories “non-renewable energy use” and “global warming potential”, environmental burdens concerning ozone depletion, acidification, and eutrophication were observed, indicating that further improvements of the evaluation of impact assessment associated with bioenergy production might be necessary.