Abstract: Sustainable Development (SD) is a very commonly used phrase in the political agenda of all European countries and in the bussiness agenda of many corporations. SD as it has been defined my the Brundland report, is not a luxury anymore, it has become a necessity for our planet to keep its existence as we know it. It is necessary to apply various policy decision tools in order to reach the required objectives on all the three pillars of sustainable development, i.e. environment, economy, society. Life Cycle Assessment (LCA) is one of those tools necessary to make the right policy decisions concerning the environmental part of sustainable development. Since LCA takes into consideration the whole life cycle of a product, it could also be used not only as a tool but also as a way of thinking, leading to playing a very important role in strategy orientation. The development of new products, the operation of existing processes, the operation of the public and the private sectors, need LCA to reach decisions that will have a minimum or no impacr to the environment. The objective of this work is to show the importance of LCA and its necessity for all policy decisions.