Neodymium and dysprosium are two rare earth elements (REEs), out of a group of 17 elements. Due to their unique properties, REEs gained increasing importance in many new technologies, like wind turbines, batteries, etc. However, the production of REEs requires high material and energy consumption and is associated with considerable environmental burdens. Due to the strong dependency of European industry on Chinese REE exports, this paper presents a possible European production chain of REEs based on the mineral eudialyte found in Norra Kärr (Sweden). This European production is compared to a Chinese route, as China produces more than 85% of today’s REEs. Bayan Obo as the largest REE deposit in China is considered as the reference system. Using the life cycle assessment method, the environmental impacts of both production lines are assessed. This study presents newly-estimated data of a possible Swedish eudialyte-based production route for Europe. Results for the new eudialyte process route show reduced environmental burdens, although the total REE content in eudialyte is much smaller than in the Bayan Obo deposit. Especially, the results for dysprosium from eudialyte outreach those for Bayan Obo due to the higher content of heavy rare earth elements.