In energy transformation processes such as combustion, gasification and reforming of fossil and renewable fuels, the conservation of energy (first law of thermodynamics) as well as the quality of energy (second law of thermodynamics) is important. This study focuses on the conversion of biomass with air and/or steam into gaseous components and char represented by solid carbon (graphite). Energy and exergy (available energy) losses are analysed by calculating the composition of a dry, ash-free typical biomass feed represented by CH1.4O0.59N0.0017 in equilibrium with varying amounts of air and/or steam. The analysis is carried out for adiabatic systems at atmospheric pressure, with input of biomass and air at ambient conditions and steam at atmospheric pressure and temperature of 500 K. For air gasification, energy and exergy in the product gas have a sharp maximum at the point where all carbon is consumed, the carbon boundary point. This is the optimum point for operating an air-blown biomass gasifier. For gasification with steam, operation at the carbon boundary point is also optimal, but thermodynamic process losses hardly increase, when adding more steam than required. The efficiency of steam and air-blown gasification was compared using the definition of rational efficiency. Although gasification by steam is more efficient (87.6% vs. 80.5%), this difference is expected to level off if exergy losses for the production of steam are taken into account. The choice between steam and air as a gasifying medium therefore seems to depend more on the required gas compositions. For steam gasification, the product gas contains mainly methane and carbon dioxide, while hydrogen, carbon monoxide, and (at least 38%) nitrogen are the main product gases for air gasification. (C) 2003 Elsevier Science Ltd. All rights reserved.