In many regions of Europe, grassland shapes the landscape and fulfils important functions in protecting nature, soil, and water. However, the traditional uses of grassland for forage production are vanishing with progress in breeding and structural adaptations in agriculture. On the other hand, the demand for biomass energy is rising due to political sustainability goals and financial measures to support renewable energy. Against this background, the Institute for Technology Assessment and Systems Analysis investigated the applicability, economic efficiency, and sustainability of different techniques for energy production from grassland as well as from grassland converted into maize fields or short-rotation poplars under German conditions. The results show that despite relatively high energy prices and the financial support for bioenergy, the effects of energy production from grassland on employment in agriculture and farmers' income are modest. What is beneficial are savings in non-renewable energy, reductions in greenhouse gas emissions, and local provision of energy carriers. if grassland biomass (grass silage or hay) is used for energy purposes, this brings the further advantages of preserving biodiversity and the cultural landscape and protecting of soil and groundwater. Negative impacts on sustainable development result from an increase in emissions, which leads to acidification, eutrophication, and risks to human health. The overall evaluation indicates that short-rotation poplars are comparatively advantageous from the economic and ecological point of view. Therefore, a development plan for grassland is required to identify areas where grassland could be used as an energy resource or where it would be favourable to install energy plantations with fast-growing perennial plants. (C) 2008 Elsevier Ltd. All rights reserved.