This paper reports on an empirical investigation about the economic and CO2 mitigation impacts of bioenergy promotion in the Austrian federal province of Vorarlberg. We study domestic value-added, employment, and fiscal effects by means of a static input-output analysis. The bioenergy systems analysed comprise biomass district heating, pellet heating, and automated wood chip heating systems, as well as logwood stoves and boilers, ceramic stoves, and buffer storage systems. The results indicate that gross economic effects are significant, regarding both investment and operation of the systems, and that the negative economic effects caused by the displacement of conventional decentralised heating systems might be in the order of 20-40%. Finally, CO2 mitigation effects are substantial, contributing already in 2004 around 35% of the 2010 CO2 mitigation target of the Land Vorarlberg for all renewable energy sources. (C) 2007 Elsevier Ltd. All rights reserved.