Since the introduction of the European Union's Renewable Energy Directive (RED), biofuel‐producing firms are required to perform life cycle assessment (LCA) based greenhouse gas accounting in order to fulfill part of directive's sustainability criteria. This paper adopts the concepts of “governing by standards” and “governing by numbers” to understand the LCA practices of biofuel‐producing firms and assess the critical moments of friction between these alternative modes of governance. We focus our analysis on the use of LCA in the Swedish biofuel industry, undertaking case studies on the use of LCA in four Swedish biofuel‐producing firms and semistructured interviews with industry associations and governmental bodies. Results indicated that the RED not only influences what biofuel sustainability entails but also structures the calculative practices used to measure it. At the same time, our results point to friction between achieving regulatory compliance and improving biofuel sustainability.