An increasing number of rural municipalities wants to meet their entire energy demand with biomass. This article gives a system analytic view on these "bioenergy villages" by balancing pros (reduction of CO2 emissions) and cons (increasing costs, land use) using the example of a model municipality in Germany. The results indicate that a 100% energy supply based on biomass from within the boundaries of a rural municipality is technically possible but less reasonable with respect to land use competition and costs of energy supply. Whereas heat and power demand in bioenergy villages can be covered with relatively little land use and to relatively low costs, the production of transport fuel based on energy crops (rape seed) leads to significant negative impacts. For a cost-efficient decarbonization of rural areas it can therefore be recommended to particularly expand the utilization of biomass for heat and power production and to reconsider the transport fuel production. (C) 2012 Elsevier Ltd. All rights reserved.