Biowaste management has a large potential for supporting closed-loop resource and nutrient management. The exploitation of this potential, however, is affected by upstream determinants, such as the consumers’ behavior (separation efficiency), which influence the quantity and quality of biowaste intended for valorization. The goal of this study is to determine the effect of these upstream determinants on the environmental and the economic performance of biowaste management, upon implementation of an improved socio-technical collection infrastructure. Interventions were performed in two areas (A and B) in a Northern German city. The methodologies used for the environmental and the economic evaluation are the life cycle assessment and the net present value analysis, respectively. The functional unit of 1 kt of waste (biowaste and residual waste) generated at households was used. Three scenarios are assessed for each area and reflect the before (Ab, Bb), during (Ad, Bd), and after (Aa, Ba) phases of these interventions. The average global warming mitigation potential for Ab and Bb was − 8, for Ad and Bd was − 56, and for Aa and Ba was − 22 kg CO2 eq·kt−1 biowaste. The economic assessment showed that the improved collection system is economically beneficial due to the larger amount of valuable products and lower overall treatment costs. The results suggest that improved sorting can influence the environmental and economic performance of the studied system and both study areas present environmental impact mitigation during the monitoring period. However, our results suggest sustained awareness-raising activities in order to maintain a high efficiency in household waste sorting.