The utilization of biomass as an alternative fuel in cofiring schemes has become a key strategy in supporting the clean energy transition within the national power sector. This study simulates the environmental and economic impacts of using oil palm empty fruit bunch (EFB) pellets as cofiring fuel in coal-fired power plants (CFPPs) through the application of Life Cycle Assessment (LCA) and Life Cycle Costing (LCC) methodologies. The system boundary is defined as cradle to grave, covering the entire cycle from oil palm cultivation to combustion waste management. The results show that cofiring with 5% EFB pellets can reduce greenhouse gas (GHG) emissions by 13.13% compared to the 100% coal scenario, with a potential economic value of emission reduction amounting to IDR 43,695 per ton of fuel. In terms of cost, using EFB based on the Government’s Maximum Benchmark Price (Harga Patokan Tertinggi, HPT) can lower fuel cost (component C) by up to IDR 56.47/kWh, or 6.55%. These findings confirm that EFB biomass provides tangible contributions to emission reduction and life cycle cost savings, making it a viable component of decarbonization strategies and circular economy initiatives in the power generation sector.