The sustainable recycling of rare earth elements (REEs) is crucial for the environment due to their role in enabling green technologies. Hydrometallurgical techniques, such as liquid-liquid extraction, are commonly used but often rely on large volumes of environmentally harmful volatile solvents. Growing environmental concerns are encouraging industries to reduce their reliance on these compounds, challenging the traditional extraction methods. Neoteric systems, such as ionic liquids or deep eutectic solvents (DES), offer promising alternatives with advantageous physical properties, and in some cases, better extraction performance. Despite their potential, they remain underutilized because they require further optimization and understanding. This study focuses on the hydrophobic eutectic solvent (HES) N,N,N',N'-Tetraoctyldiglycolamide (TODGA) and decanoic acid for the extraction of REEs from a nitric acid leachate. The results are complemented by a systematic comparative study between the hydrophobic eutectic solvent and traditional solvent equivalent for REE extraction. Compared to conventional organic solvent, the HES exhibits enhanced extraction performance with notable selectivity against iron. UV-vis-near infrared measurements support the hypothesis of a similar extraction mechanism to that in the conventional reference solvent, attributing the higher obtained extraction efficiency to the greater concentration of TODGA in the HES, without the need of a phase modifier to prevent phase separation. The eutectic mixture also exhibits lower volatility as measured by thermal gravimetric analysis, improving the operational safety and environmental sustainability of the extraction process. A life cycle assessment further demonstrates this improvement, showing more favourable results for the HES system to purify 1 kg of neodymium (Nd).