Increasing the sustainability of the livestock sector is a vital goal in lowering the environmental burden of food production globally. The dairy sector is of particular interest in this context since it is responsible for a significant share of this burden. In the past, research has focused on approaches to lower the impacts at the farming stage of production, while fewer efforts have been directed at the later stages of the value chain. By-product valorisation is a tool within the wider framework of Circular Economy that allows to increase the efficiency of resource use by increasing the product output at high quality, potentially leading to a sustainable intensification. The present study aims to test this hypothesis. For this purpose, data was collected from a cheese production case study and pilot-scale experiments on whey valorisation, to model several scenarios of by-product valorisation in the dairy value chain. This includes a decentralised valorisation scenario modelled for the purpose of supporting a local Circular Economy and three scenarios representing common valorisation approaches. The impacts of the entire value chain are then assessed based on an attributional LCA considering three different functional units in order to examine the potential for a relative reduction of impacts per unit of product output. The results suggest that while there is no clear favourite among the investigated valorisation scenarios, by-product valorisation in general can lower the relative impacts of the value chain significantly as compared to the base scenario without valorisation. Depending on the valorisation scenario and impact category, impact reductions of up to 14%, 20% and 32% can be achieved for the three functional units, respectively. Hence, by-product valorisation allows for a sustainable intensification. While centralised lower quality valorisation is favourable in terms of product mass and overall process efficiency, decentralised and high-quality valorisation performs better when the economic value of the products is taken into consideration. Thus, the choice for the most suitable approach for a production site will depend on the context of the production and the intentions of the stakeholders.

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