Fossil fuels represent the primary energy supply utilized worldwide. Despite this, fossil fuels are both limited resources and have severe environmental impacts that result in climate change and several health issues. Fuel cells (FCs) are efficient energy conversion devices, which can be used for energy conversion and storage. Although different types of FCs exhibit promising features for future usage, they also have some environmental aspects that ought to be addressed. This review summarizes the different types of FCs, including the advantages and disadvantages of each. The different environmental aspects of the common types of FCs are then comprehensively discussed. This review also compares FCs to conventional power generation systems to illustrate their relative environmental benefits. Although FCs are considered more environmental-friendly compared to conventional energy conversion systems, there are still evident operational and environmental setbacks among different FC types. These setbacks, however, must be compared in context of the intended application, fuel type, and all other involved factors in order to have a clear and fair comparison. FCs are considered environmentally friendly and more efficient. However, this is usually only when considering the operational phase or the operational perspective. The main challenge facing FCs still remains fuel sourcing, like, for example, in the case of obtaining hydrogen for hydrogen FCs, where hydrogen production causes environmental impacts. The same applies for electrode materials, where, in many cases, either a noble metal such as platinum, or other precious metals, or costly material. With this consideration, a life cycle assessment (LCA) is a useful tool that considers all of the manufacturing, fuel sourcing, and operational phases. Although using FCs shows evident environmental improvements compared to conventional energy sources, the LCA of FCs compared to that of conventional power sources shows a similar performance. This is mainly due to the EIs associated with fuel sourcing and material acquisition, either for precious metals used for low-temperature FCs, or thermally and chemically stable materials used for medium- and high-temperature FCs. Both of these also contribute largely to the cost of FCs. Developments in both areas will undoubtedly help to make FCs both more environmental-friendly and cost-efficient.