The application of biochar as a soil amendment is a potential strategy for carbon sequestration. In this paper, a slow pyrolysis system for generating heat and biochar from lignocellulosic energy crops is simulated and its life-cycle performance compared with that of direct biomass combustion. The use of the char as biochar is also contrasted with alternative use options: cofiring in coal power plants, use as charcoal, and use as a fuel for heat generation. Additionally, the influence on the results of the long-term stability of the biochar in the soil, as well as of biochar effects on biomass yield, is evaluated. Negative greenhouse gas emissions are obtained for the biochar system, indicating a significant carbon abatement potential. However, this is achieved at the expense of lower energy efficiency and higher impacts in the other assessed categories when compared to direct biomass combustion. When comparing the different use options of the pyrolysis char, the most favorable result is obtained for char cofiring substituting fossil coal, even assuming high long-term stability of the char. Nevertheless, a high sensitivity to biomass yield increase is found for biochar systems. In this sense, biochar application to low-quality soils where high yield increases are expected would show a more favorable performance in terms of global warming.