Biomass can be applied as the primary source for the production of hydrogen in the future. The biomass is converted in an atmospheric fluidized bed gasification process using steam as the gasifying agent. The producer gas needs further cleaning and processing before the hydrogen can be converted in a fuel cell; it is assumed that the gas cleaning processes are able to meet the requirements for a PEM-FC. The compressed hydrogen is supplied to a hydrogen grid and can be used in small-scale decentralized CHP units. in this study it is assumed that the CHP units are based on low temperature PEM fuel cells. For the evaluation of alternative technologies the whole chain of centralized hydrogen production from biomass up to and including decentralized electricity production in PEM fuel cells is considered. Two models for the production of hydrogen from biomass and three models for the combined production of electricity and heat with PEM fuel cells are built using the computer program Cycle-Tempo. Two different levels of hydrogen purity are considered in this evaluation: 60% and 99.99% pure hydrogen. The purity of the hydrogen affects both the efficiencies of the hydrogen production as well as the PEM-FC systems. The electrical exergy efficiency of the PEM-FC system without additional heat production is calculated to be 27.66% in the case of 60% hydrogen and 29.06% in the case of 99.99% pure hydrogen. The electrical exergy efficiencies of the whole conversion chain appear to be 21.68% and 18.74%, respectively. The high losses during purification of the hydrogen gas result in a higher efficiency for the case with low purity hydrogen. The removal of the last impurities strongly increases the overall exergy losses of the conversion chain. (C) 2009 Elsevier B.V. All rights reserved.