The objectives of this paper are to analyze the technical potentials and the respective costs of energy production from biomass in the Federal Republic of Germany. Both benefits and costs of residual products are investigated (i.e. residual wood, straw and biogas). The energy potential is approximately 310 PJ a-1, or about 3.3% of the final energy demand in Germany in 1991. The corresponding costs vary widely: straw and residual wood covers the lower and biogas the upper border. The possibilities of producing solid energy carriers and liquid fuels on agricultural land are also investigated. The contribution of these options to the final energy demand was found to be larger. Nevertheless, they are still limited as they are strongly dependent on the amount of agricultural land available. The options for producing solid fuels are much more efficient compared with the production of liquid energy carriers. Conclusions are drawn on the possibilities and restrictions of energy production from biomass in Germany's energy system.