New raw materials for transportation fuels need to be introduced, in order to fight against climate change and also to cope with increasing risks of availability and price of oil. Peat has been recognised suitable raw material option for diesel produced by gasification and Fischer-Tropsch (FT) synthesis. The energy content of Finnish peat reserves is remarkable. In this study, the greenhouse impact of peat-based FT diesel production and utilisation in Finland was assessed from the life-cycle point of view. In 100 year's time horizon the greenhouse impact of peat-based FT diesel is likely larger than the impact of fossil diesel. The impact can somewhat be lowered by producing peat from the agricultural peatland (strong greenhouse gas emissions from the decaying peatlayer are avoided) with new peat production technique, and utilising the produced biomass from the after-treatment area for diesel also. if diesel production is integrated with pulp and paper mill to achieve energy efficiency benefits and if the electricity demand can be covered by zero emission electricity, the greenhouse impact of peat-based FT diesel reduces to the level of fossil diesel when agricultural peatland is used, and is somewhat higher when forestry-drained peatland is used as raw material source. (C) 2009 Elsevier Ltd. All rights reserved.