Coal byproducts could be a promising feedstock to alleviate the supply risk of critical rare earth elements (REEs) due to their abundance and REE content. Herein, we investigated the economic and environmental potential of producing REEs from coal fly ash and lignite through an integrated process of leaching, biosorption, and oxalic precipitation on the basis of experimental data and modeling results. Two microbe immobilization systems (polyethylene glycol diacrylate (PEGDA) microbe beads and Si sol?gels) were examined for their efficiency in immobilizing Arthrobacter nicotianae to selectively recover REEs. Techno-economic analysis revealed that North Dakota lignite could be a profitable feedstock when Si sol?gel is used due to its high cell loading and REE adsorption capacity as well as high reuse cycles. Life cycle analysis revealed that Si sol?gel-based biosorption could be more environmental friendly than the prevailing REE production in China due to the use of less toxic chemicals. However, fly ash sourced from Powder River Basin coals was neither profitable nor environmentally sustainable, primarily due to low solubility of high-value scandium at an economical pulp density (100 g ash/L of acid solution). To further improve the proposed biotechnology, future research could focus on scandium recovery, leaching efficiency at a high pulp density, and reuse cycles of the immobilized microbes.